International Monetary Fund (IMF) executive board members urged El Salvador authorities to drop Bitcoin's (CRYPTO: BTC) adoption, warning there could be dire consequences for the nation if it keeps using the cryptocurrency.
What Happened: In a Tuesday report, the IMF claimed using Bitcoin as legal tender could affect El Salvador because utilizing the crypto as legal tender carried “large risks” related to financial stability, financial integrity and consumer protection.
Executive board members insisted El Salvador should “narrow the scope of the Bitcoin law by removing Bitcoin’s legal tender status," also highlighting that issuing Bitcoin-backed bonds adds a whole other series of potential risks to the nation's economy.
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The IMF released those recommendations following an Article IV consultation with El Salvador's authorities which saw its economists visit the country “to assess economic and financial developments and discuss the country's economic and financial policies with government and central bank officials.”
Back in August 2021, IMF heavily criticized El Salvador's decision to adopt Bitcoin as a legal tender — describing it as "an inadvisable shortcut" compared to developing its own digital currency.
