• The Fund had already warned that the adoption of the cryptocurrency “can bring significant risks” for the Salvadoran economy.
• The IMF’s new demand for President Nayib Bukele was not met with immediate response by the president. On Monday, however, he declared that it was the best time to make investments in Bitcoin.

The International Monetary Fund (IMF) urged El Salvador on Tuesday to “eliminate the quality of legal tender” of while expressing its “concern” about the issuance of cryptocurrency-backed bonds that the country’s government plans to do Central American, reported EFE.

In a statement the International Credit Organization announced that its Executive Board concluded their Article IV consultation with El Salvador. The annual consultation analyzed the Nayib-Bukele government’s strategy to combat the pandemic. It also discussed the possibility of Bitcoin being used as a payment method.

President Bukele declared that the government’s main economic projects are the acceptance of Bitcoin as a currency of payment and promotion of El Salvador, a crypto-financial center in Latin America.

The Central American leader, via his Twitter account (NYSE:), promotes Bitcoin purchase and other projects related to the currency. Bitcoin City is one of them. The school to learn about blockchain technology it plans to finance with the crypto bonds (or volcano bonds) controversially.

Bukele has been denied a meeting by the IMF

In early January, El Salvador’s Finance Minister, Alejandro Zelaya, announced that the government would send nearly 20 bills to Congress to create a regulatory framework to regulate the issuance of bitcoin bonds.

So far, Bukele has not responded to the IMF’s demand. Bukele rejected the IMF’s November report warning him of the dangers to the country if Bitcoin is adopted on November 7th, 2021.

In this report, the Fund recommended that El Salvador “limit the scope of the Bitcoin Law” in the economy in order to avoid risks. Bukele not only ignored the agency’s recommendation, but also responded with a mocking tone.

Bukele was asked by the IMF to meet with them in order to address Bitcoin’s legal status and potential risks. However, this has so far not happened.

“The adoption of bitcoin as a currency generates a series of macroeconomic, financial and legal issues that require very careful analysis,” said Fund spokesman Gerry Rice, according to a review by El País.
Bukele, who was in Turkey last week to visit his family and friends, was warmly received by President Recep Takyip Erdogan. The leaders of the two countries signed six bilateral cooperation deals in diverse sectors such as trade, diplomacy and defense.

Erdogan and Bukele spoke at the meeting about Bitcoin and other cryptocurrencies. However, the discussions between Erdogan and Bukele on this topic have not taken place. Due to the Turkish lira’s decline, Turkey currently faces a severe currency crisis.

The Flipside

• BTC, and all other cryptocurrency have fallen to the IMF’s demand. So far this month, the world’s largest cryptocurrency by market cap has lost nearly half its value.

Bukele’s reputation has increased both within and without El Salvador. The president, however, has responded with ridicule:

“Most people go in when the price is up, but the safest and most profitable moment to buy is when the price is down. This is not difficult. You can invest some of your McDonald’s (NYSE 🙂 salary in Bitcoin. Now go back to flip more burgers you lazy fvçk!” he wrote.
Although IMF warned the Salvadoran government several times about Bitcoin’s volatility and suggested that they should take effective steps to regulate it, Bukele feels that the country is on the right track.

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