IMF Withholds Funding for El Salvador Due to Bitcoin Alliance: Report

El Salvador is reportedly in a tense situation with the International Monetary Fund (IMF) over integrating bitcoin into its core financial system. Bitcoin, the oldest and most expensive cryptocurrency, is accepted as legal tender in El Salvador along with the US dollar, the country’s fiat currency. El Salvador’s fiscal consolidation with this highly volatile digital asset is not a decision that sits well with the IMF.

The IMF has asked. El Salvador To change its policies around bitcoin to secure $1.4 billion in aid it needs to accelerate payments on public debt and other financial obligations. Given El Salvador’s pro-crypto stance, its negotiations with the IMF are currently at a standstill. Reports Said this week by the international publication InfoBae.

Last week, El Salvador received a fresh warning from an IMF colleague. The official has apparently contacted the Salvadoran president. Naib Bukele. That the Institute is concerned about the financial risks associated with Bitcoin.

Despite the ongoing conflict with the IMF, Buquel continues El Salvador’s engagement with Bitcoin. In 2022, Bokel set up a National Bitcoin Office Tasked with maintaining all official records related to the digital asset.

The President of Salvador gave his approval. Bitcoin Bonds To allow the country to raise capital to pay off debts for the country, as well as contributing through ‘Volcano Tokens’ to the ‘Bitcoin City’ for the ambitious Special Economic Zone of Bakil.

Around April last year, when bitcoin was trading as low as $29,449 (roughly Rs. 24.5 lakh), El Salvador Saved 18% decrease in BTC based remittances.

Despite this shortcoming, Bockel Allegedly confirmed Keep buying 1 BTC tokens daily until the asset becomes unaffordable.

Under these circumstances, it is unclear when the IMF will consider processing the financial assistance Salvador needs.

Meanwhile, the IMF is working with a group of 20 countries. Set the rules Monitoring and regulating the sector of volatile digital assets. The organization has also collaborated with the Financial Stability Board (FSB) to draft these rules.

There is also the IMF. working On a new platform to enable international transactions through CBDCs.

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