The International Monetary Fund (IMF) has once again recommended that El Salvador narrow the scope of Bitcoin legislation and adoption.
Julie Kozack, IMF Director of Communications, told the press: briefing On Thursday, the IMF announced its ongoing engagement with El Salvador authorities. “Addressing the risks posed by Bitcoin is a key element of these discussions,” she said.
“Our recommendations are to narrow the scope of Bitcoin law, strengthen the regulatory framework and oversight of the Bitcoin ecosystem, and limit public sector exposure to Bitcoin,” Kozack added. .
Kozack said the IMF aims to reach an agreement with El Salvador on a new IMF-backed program that “will help with macroeconomic stability and coordination and reforms that promote growth.”
The IMF’s proposal is as follows: August Statement In particular, it addresses El Salvador’s financial problems, with Bitcoin as an important point on its agenda. “Negotiations have advanced on a funding program focused on policies to strengthen public finances, strengthen bank reserves, improve governance and transparency, and mitigate Bitcoin risks,” the IMF said.
El Salvador’s so-called Bitcoin law took effect in September 2021, making it the first country to adopt Bitcoin as an alternative fiat currency. The IMF is exploring policies with El Salvador authorities to stabilize the country’s economy, including proposals for managing risks associated with Bitcoin.
“While many risks have not yet materialized in Bitcoin, there is a common recognition that further efforts are needed to increase transparency and mitigate potential financial and financial stability risks posed by Bitcoin projects. “Further discussions are still needed in this and other key areas,” the IMF said in August.
Additionally, El Salvador’s President Nayib Bukele, who passed a bill legalizing Bitcoin as fiat currency last August, said Currency experiments have had mixed results. Bukele added that while Bitcoin has had limited domestic adoption, it is still a “net positive” for the country.
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