The IMF Urges El Salvador to Drop Bitcoin as Legal Tender as President Bukele Doubles Down

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The International Monetary Fund (IMF) has never been too pleased with El Salvador’s decision to make Bitcoin legal tender. Nor were other global banks. El Salvador made the switch to Bitcoin after the IMF refused to lend $1.3 billion to the country last year. The country was in bad financial shape and president Nayib Bukele made the controversial decision to adopt Bitcoin as legal tender in September 2021.

Ever since then, he claims that the country is revitalized. While many have projected an instant fail, El Salvador is flying the Bitcoin flag high. President Bukele is doubling down on the bet all the time, buying fresh Bitcoins when the market drops down. It’s been a great strategy so far and has obviously frustrated the IMF.

Drop Bitcoin or Else…

On Tuesday, the IMF sent a stern warning to El Salvador’s leader to drop Bitcoin or else. Well, not in those exact words, but something close to it. The country has been stocking Bitcoin all the time, buying 410 new Bitcoins during the recent dip. Of course, it doesn’t sit well with financial organizations starting with the IMF who has expressed concern over president Bukele’s plan to issue the so-called volcano bonds that are linked to Bitcoin.

In September 2021, El Salvador became the world’s first country to officially adopt Bitcoin as legal tender. Its residents can use it to buy goods and pay for services legally, and even for taxes. The IMF has warned president Bukele that it’s a bad idea then, and is now raising further concerns about the move. Its directors have stressed several times that there are big risks associated with cryptocurrencies and the use of Bitcoin when it comes to financial stability and integrity.

President Nayib Bukele is having none of it. He constantly criticizes big financial organizations on his Twitter account and has bashed the IMF too. He’s a self-styled CEO and a Bitcoin evangelist that has spent a lot of the country’s public dollars buying BTC. He constantly tweets that the idea is to buy low and sell high, not being fazed by the recent price drops.

No Signs of Progress

El Salvador’s talks with the IMF regarding that $1.3 billion loan have made no progress. The IMF is even more hesitant about lending the money now when the country has made the switch to BTC. Bukele’s plans for a Bitcoin city powered by the volcano bonds have not helped at all. El Salvador’s relationship with the USA has deteriorated, showing no improvements in that sector as well.

President Bukele has the ear of top Bitcoin fans. Former US government employee Edward Snowden tweeted that ‘someone looks nervous’ in regards to the IMF’s warning, and president Bukele liked that tweet. He’s constantly pushing for a decentralized world free from the chains of financial organizations, shattering the country’s image in the West.

It remains to be seen if his gamble pays off, but things are apparently great so far.

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January 26, 2022: • No Comments

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