The International Monetary Fund (IMF) has urged El Salvador to reverse its decision to make Bitcoin legal tender. In September, El Salvador became the first country to allow consumers to use cryptocurrency in all transactions, alongside the US dollar. The decision sparked large-scale protests over fears it would bring instability and inflation to the impoverished Latin American country.
Bitcoin has lost roughly half its value since November. The IMF has warned President Nayib Bukele of the risks that cryptocurrency represents for the country, noting that it would be difficult to obtain a loan from the institution.
The board directors now”Urge Authorities to Reduce Scope of Bitcoin Law removing Bitcoin’s legal tender status,” according to a statement. They highlighted the “major risks associated with the use of Bitcoin in financial stability, financial integrity, and consumer protection” and with the issuance of Bitcoin-backed bonds. .