38.6c New Delhi, India, Tuesday, April 16, 2024
Business

IMF voices concerns over El Salvador’s move to make bitcoin legal tender

By Pariyal Gupta      16 June, 2021 05:53 PM      0 Comments
IMF voices concerns over El Salvador’s move to make bitcoin legal tender

El Salvador’s adoption of Bitcoin as legal tender may imply a series of risks and regulatory challenges, the International Monetary Fund (IMF) said on Thursday (June 10, 2021).

“Adoption of bitcoin as legal tender raises a number of macroeconomic, financial, and legal issues that require very careful analysis. We are following developments closely, and we’ll continue our consultations with the authorities.”, IMF spokesman Gerry Rice said.

“Crypto-assets can pose significant risks and effective regulatory measures are very important when dealing with them.”, he added.

An IMF team is conducting virtual meetings with El Salvador on its Article IV review of the country and a potential credit program including policies to strengthen economic governance. The team will meet President Bukele on Thursday.

El Salvador became the first country in the world to adopt bitcoin as legal tender after the country’s Congress on Wednesday (June 9, 2021), approved President Nayib Bukele’s proposal to embrace the cryptocurrency, a move that delighted the currency’s supporters.

“It will bring financial inclusion, investment, tourism, innovation, and economic development for our country”, says President Nayib Bukele.

Under the law, Bitcoin must be accepted by firms when offered as payment for goods and services. Tax contributions can also be paid in cryptocurrency. 

Its use as a legal tender will begin in 90 days, with a bitcoin-dollar exchange rate set by the market. Mr. Bukele said the government and the Bank did not currently hold any bitcoin. 

President Bukele said that he planned to build a bitcoin mining hub around the country’s geothermal potential. He also said that El Salvador would offer citizenship to people who showed evidence they had invested in at least three bitcoins.

“I’ve just instructed the president of La Geo (our state-owned geothermal electric company) to put up a plan to offer facilities for bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emission energy from our volcanos. This is going to evolve fast,” said President Bukele.

Cryptocurrency supporters hailed the move as legitimizing the emerging asset, but its impact on bitcoin regulation, taxation, or adoption in other countries remains to be seen.



Share this article:



Leave a feedback about this
TRENDING NEWS

call-for-chapters-gender-based-violence-and-religion
Trending Law School
Call For Chapters: Gender-Based Violence and Religion

Calling For Book Chapters: As an editor, Dr. Amit Anand, Assistant Professor, School of Legal Studies, REVA University, Bengaluru, is inviting people to contribute to a book, entitled "Gender-Based Violence and Religion." This book is scheduled to be published by Cambridge Scholars Publishing.

15 April, 2024 04:21 PM
sc-extends-stay-on-allahabad-hc-order-approving-survey-of-shahi-idgah-complex
Trending Judiciary
SC extends stay on Allahabad HC order approving survey of Shahi Idgah complex

SC extends stay on Allahabad HC's order for survey of Shahi Eidgah mosque next to Krishna Janmabhoomi.

15 April, 2024 05:19 PM

TOP STORIES

misleading-advts-case-baba-ramdev-balkrishna-tender-apology
Trending Business
Misleading advts case: Baba Ramdev, Balkrishna tender apology

Baba Ramdev, Balkrishna apologize for misleading ads. SC contempt plea hearing set for April 10. Patanjali assures compliance with court orders.

10 April, 2024 10:44 AM
sc-allows-gangster-turned-politicians-son-to-attend-fatiha
Trending Judiciary
SC allows gangster-turned-politician's son to attend 'Fatiha'

Supreme Court allows jailed MLA Abbas Ansari to attend his father's funeral prayers, granting temporary release under police custody.

10 April, 2024 11:11 AM
each-moveable-property-not-required-to-be-disclosed-by-candidates-in-election-sc
Trending Judiciary
Each moveable property not required to be disclosed by candidates in election: SC [Read Judgment]

SC rules not every movable asset needs disclosure in elections. Privacy rights preserved. Details vary per case. High value assets matter.

10 April, 2024 12:02 PM
delhi-cm-arvind-kejriwal-moves-supreme-court
Trending Judiciary
Delhi CM Arvind Kejriwal moves Supreme Court

Delhi CM Arvind Kejriwal moves Supreme Court against dismissal of plea in liquor policy scam case. Lawyers seek early hearing from CJI-led bench.

10 April, 2024 12:39 PM

ADVERTISEMENT


Join Group

Signup for Our Newsletter

Get Exclusive access to members only content by email