IMF Urges El Salvador to Narrow Bitcoin Experiment

The International Monetary Fund (IMF) is still not pleased with El Salvador’s Bitcoin experiment but will continue to work with the country. 

At a press conference Thursday, the body’s spokesperson Julie Kozack was quoted saying that the IMF had recommended “limiting public sector exposure to Bitcoin,” according to a Reuters report.

El Salvador made Bitcoin legal tender in the country back in 2021. The IMF—which has been in talks with El Salvador for years about a fund-supported program to strengthen growth prospects in the country—has been one of the loudest critics of the Bitcoin move. 

“What we have recommended is a narrowing of the scope of the Bitcoin law, strengthening the regulatory framework and oversight of the Bitcoin ecosystem, and limiting public sector exposure to Bitcoin,” Kozack was quoted saying on Thursday. 

Neither the IMF nor a press person for the Salvadoran government immediately responded to Decrypt’s questions.

The IMF warned in 2021 that El Salvador’s move to make Bitcoin legal tender in the country raised “a number of macroeconomic, financial and legal issues.” 

But it admitted in August that many of the risks of the Bitcoin experiment “had not yet materialized.”

The country’s leader President Nayib Bukele has always brushed off concerns institutions and politicians have had about the project—even tweeting memes mocking the IMF’s grievances.

President Bukele—who has been criticized by human rights organizations for being an autocrat but praised by libertarians and conservatives for making El Salvador safer—admitted in an August interview with TIME that the Bitcoin experiment had fallen short. 

The Bitcoin law requires businesses in the tiny Central American country to accept the asset if they have the technological means to do so. The government has also bought huge amounts of the digital currency, with President Bukele claiming that he would buy Bitcoin “naked” or while “in the toilet.” 

Back in 2021, Salvadorans were given $30 of free Bitcoin via the government crypto wallet. But Decrypt—and research polls—found that many citizens have been indifferent to receiving and using the asset.