IMF Urges El Salvador to Strengthen Bitcoin Regulatory Framework and Oversight

The International Monetary Fund (IMF) has recommended that El Salvador narrow the scope of its bitcoin law and strengthen the regulatory framework and oversight of the bitcoin ecosystem.

As reported by Reuters, IMF spokeswoman Julie Kozack said during a press conference that the IMF recommended El Salvador limit its public sector exposure to bitcoin.

This is not the first time the IMF has warned El Salvador. In August, the IMF warned that “Although many of the risks have not yet materialized, a collective decision should be taken that further efforts are needed to increase transparency and reduce potential fiscal and financial stability risks arising from the bitcoin project.”

Bitcoin discussions between El Salvador and the IMF date back years. In November 2021, the IMF declared that bitcoin should not be used as legal tender in El Salvador, calling on the Central American country to regulate this ecosystem and strengthen its supervision.

El Salvador made bitcoin legal tender in September 2021, becoming the first country globally to do so. The country currently holds 5892 BTC, equivalent to approximately $345 million at today’s price.

El Salvador’s President Nayib Bukele recently said his plan to make the country a hub for the largest and oldest cryptocurrency is “definitely positive” but that adoption has fallen short of his expectations.

In its presentation on Thursday, the IMF evaluated Bukele’s 2025 budget, which is expected to pay off the country’s debts, positively.