The International Monetary Fund has said El Salvador\u2019s recent decision to make Bitcoin legal tender in the country may raise legal and financial concerns.<\/p>\n
In a Thursday press briefing from the International Monetary Fund, or IMF, spokesperson Gerry Rice said the group was already in discussions with lawmakers in El Salvador over a loan to support the country\u2019s economy, having approved emergency funds related to the pandemic last year. However, Rice said an IMF team would be meeting with President Nayib Bukele today and implied crypto would be a likely topic for discussion.<\/p>\n
\u201cAdoption of Bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis,\u201d said Rice. \u201cWe are following developments closely, and we\u2019ll continue our consultations with the authorities.\u201d<\/p>\n
Spokespeople for the IMF have often voiced concerns about countries adopting digital currency. In March, the group issued a similar warning against the Marshall Islands\u2019 recognizing its digital sovereign currency, called SOV, as legal tender, as it may pose similar legal and financial risks. In that case, a spokesman said the islands\u2019 local economy had been strained by the economic fallout of the pandemic and likely wouldn\u2019t be corrected with the SOV.<\/p>\n
Related: <\/em><\/strong>Marshall Islands digital currency would ‘raise risks,’ says IMF<\/em><\/strong><\/p>\n In the case of El Salvador, the time between the introduction of ideas and action is seemingly short. President Bukele first announced he would propose a bill making Bitcoin (BTC) legal tender in El Salvador at a pre-recorded video message at the Bitcoin 2021 conference this weekend. The legislation passed with a supermajority in the nation’s Legislative Assembly yesterday. <\/p>\n Though the country is still seeking support from the IMF related to the pandemic this year, it has already begun to consider the energy needs of Bitcoin miners. Bukele said he would be instructing state-owned electrical company LaGeo, to make certain facilities available to miners to utilize geothermal power from the country\u2019s volcanoes \u2014 El Salvador currently operates the two geothermal plants in Ahuachap\u00e1n and Berl\u00edn.<\/p>\n \u201cCrypto assets can pose significant risks,\u201d said Rice. \u201cEffective regulatory measures are very important when dealing with them.\u201d<\/p>\n