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After the miraculous turn around pulled by El Salvador, and it’s future focused vision to invest in Bitcoin, the IMF is here to call it to stand back in line.
The IMF is once again asking El Salvador to rethink its use of Bitcoin. On October 3, they recommended that the country reduce its dependence on the cryptocurrency, tighten regulations, and limit the public sector’s involvement with Bitcoin.
Why the IMF Is Concerned About El Salvador’s Bitcoin Move
Back in 2021, El Salvador made headlines as the first country to make Bitcoin legal tender. But the IMF has never been comfortable with that decision. While some of the feared risks haven’t surfaced yet, the IMF keeps pressing El Salvador to move back to traditional financial systems.
The IMF’s Ongoing Concerns About Bitcoin
It’s no secret that the IMF isn’t fond of Bitcoin. As inflation rises, people—and even some countries—are turning to Bitcoin for financial stability. Still, the IMF remains cautious. For example, in 2023, they helped Andorra keep track of Bitcoin transactions, and in 2024, they advised Pakistan to tax crypto profits as part of a loan deal.
IMF Pushes for Central Bank Digital Currencies (CBDCs) Instead
While they’re wary of Bitcoin, the IMF is all for central bank digital currencies (CBDCs). In September, they launched the “REDI” framework, which stands for regulation, education, design, and incentives. This plan is meant to help central banks adopt digital currencies and make them more appealing to the public.
