IMF Engages With El Salvador, Views Decision On Bitcoin As 'Not Advisable' - Georgieva

The International Monetary Fund (IMF) considers El Salvador's decision to embrace Bitcoin as legal tender as "not advisable" but continues consultations with the authorities, IMF Managing Director Kristalina Georgieva said on Thursday

WASHINGTON (UrduPoint News / Sputnik - 29th July, 2021) The International Monetary Fund (IMF) considers El Salvador's decision to embrace Bitcoin as legal tender as "not advisable" but continues consultations with the authorities, IMF Managing Director Kristalina Georgieva said on Thursday.

"We have been engaged with El Salvador," Georgieva said during a virtual conversation on cryptocurrencies.

On June 8, the country's parliament adopted a law that accepts Bitcoin as legal tender just days after President Nayib Bukele announced his intention to officially introduce the use of the cryptocurrency. The legislation will grant Bitcoin "liberating power," unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out.

The El Salvador authorities have said they aim to facilitate the financial inclusion of all residents and promote economic growth.

In addition, Bukele said the state is obligated to provide alternatives to allow residents to carry out transactions in Bitcoin and have automatic and instant convertibility into US Dollars.

Georgieva acknowledged that El Salvador made a sovereign decision, but expressed serious concerns about it and said the IMF shared its position with country's authorities.

"There is a combination of concerns that - from our perspective - makes this decision not advisable," she said.

Georgieva advised El Salvador to wait and see how the situation develops in the future. "Unfortunately, there are no easy mitigation strategies for these risks," she said.