Ramazan Eles 
The International Monetary Fund (IMF) has issued a warning to El Salvador over the potential risks associated with its decision to adopt Bitcoin as legal tender. While the Central American nation’s bold experiment has yet to cause significant harm, the IMF is urging for increased transparency.
In a statement released on Tuesday, the IMF noted that “while many of the risks related to Bitcoin have not yet materialized, there is a shared view that more efforts are needed to increase transparency and mitigate potential fiscal and financial stability risks stemming from the Bitcoin project.”
El Salvador adopted Bitcoin as legal tender in 2021, despite warnings from the IMF about the potential macroeconomic, financial, and legal challenges. President Nayib Bukele has remained committed to Bitcoin, and the country’s public wallet indicates that it currently holds over $327 million in Bitcoin.
As part of Bitcoin’s adoption, El Salvador implemented a Bitcoin Law that mandates businesses to accept Bitcoin if they have the technological capacity to do so. However, many businesses have been slow to adopt Bitcoin as a form of payment.
During discussions with the IMF, Bukele assured that Bitcoin adoption would not undermine the country’s macroeconomic stability. The two parties have been negotiating a potential loan program aimed at strengthening El Salvador’s financial position.
In its latest statement, the IMF indicated that progress has been made in discussions on a fund-supported program designed to boost growth in El Salvador, one of the poorest countries in the Americas.