the IMF suggests strengthening Bitcoin regulation

El Salvador and Bitcoin have once again been addressed by the International Monetary Fund (IMF), which has suggested that the country strengthen its regulation. 

El Salvador and the IMF: continued pressure on the country’s Bitcoin regulation

Once again, the International Monetary Fund (IMF) has intervened to put pressure on El Salvador regarding regulation on Bitcoin. 

In fact, during a press conference, Julie Kozack, director of the IMF’s communication department, stated:

“We have recommended narrowing the scope of the bitcoin law, strengthening the regulatory framework and supervision of the bitcoin ecosystem, and limiting the public sector’s exposure to bitcoin”

In practice, the IMF recommends El Salvador to narrow the scope of the Bitcoin law, in order to strengthen the regulatory framework, supervising the ecosystem and limiting the risks.   

Such pressure comes despite the country that made BTC legal tender in 2021 is recording an annual GDP growth rate of 3%. 

El Salvador: the IMF asks the country for efforts on Bitcoin regulation 

In reality, regarding the regulation on Bitcoin by El Salvador, the IMF is just renewing what was anticipated in a more “soft” way last August.

In fact, the IMF report from that time spoke of the progress in the discussion with the government of El Salvador.

Specifically, the IMF praised the progress in the negotiations of a program aimed at strengthening public finances, increasing bank reserves, and improving governance and transparency. 

Not only that, speaking of Bitcoin, the IMF has only acknowledged the need for El Salvador to strive to improve transparency and mitigate risks to fiscal and financial stability. 

Such statements have never indicated a total acceptance of the queen of crypto, but they have shown a more relaxed and moderate approach by the IMF on the discourse compared to the past. 

The small disappointment regarding the spread of BTC adoption in the country

On one hand, the IMF is softening its stance on BTC, on the other hand, the President of El Salvador, Nayib Bukele, has revealed a small disappointment regarding it. 

In fact, also in August 2024, Bukele said to TIME that the adoption of Bitcoin in El Salvador is not as widespread as hoped. 

In practice, the President would have preferred that his citizens had followed his strategy on Bitcoin, explaining how much from 2021 to today, they would have earned with BTC. 

At the same time, however, Bukele is pleased that he did not force anyone to follow him, and that he allowed the adoption of Bitcoin in the country to be a free choice for Salvadorans.