Just over a month after the Parliament of El Salvador sanctioned the Bitcoin Law and converts BTC into a currency of legal status, the International Monetary Fund (IMF) issued a statement detailing the risks associated with the initiative. Although other traditional organizations have taken the same position, several countries in the region seek to follow in the footsteps of the Central Americans.
Salvadoran legislators who supported the project – and even President Nayib Bukele himself, who introduced it – highlighted “financial inclusion” as the main reason for supporting the initiative. The IMF did not disagree with the need to deal with this scourge, but they consider that the way is an “inadvisable shortcut.”
Tobias Adrian and Rhoda Weeks-Brown , officials of the international organization, recognized – and highlighted – that digital assets are capable of offering cheaper and faster payments, and even improve competition between payment providers or contribute to the remittance market. However, they underlined the difficulty in legal terms involved in following the path of El Salvador.
“It requires significant investment and difficult political decisions. This includes clarifying the role of the public and private sectors in the provision and regulation of digital forms of money,” noted Adrian and Weeks-Brown.
Finally, officials suggested that the initiative might be better applicable in countries with a stable economy and low levels of inflation. “If goods and services were priced in both a real currency and a crypto asset, households and businesses would spend a significant amount of time and resources choosing what money to keep rather than engaging in productive activities,” they completed.