IMF Warns El Salvador Against Bitcoin Exposure Expansion

Following its official visit to El Salvador, the International Monetary Fund (IMF) has issued a statement urging the country’s authorities to reconsider their plans to increase government exposure to Bitcoin.

According to the IMF, El Salvador has yet to overcome the potential risks associated with the adoption of Bitcoin as legal tender. The fund’s experts warned against trading in Bitcoin-backed bonds, suggesting that a new debt financial instrument nominated in BTC may have a negative impact on the country’s underlying macroeconomic indicators.

Given the legal risks and volatility of cryptocurrency markets, the IMF recommended that El Salvadoran authorities reconsider their plans to expand government exposure to Bitcoin, including by issuing tokenized bonds.

Despite the IMF’s warnings, El Salvador’s President Nayib Bukele has defended the country’s adoption of Bitcoin and its financial success.