IMF Praises El Salvador’s Fiscal Performance But Urges Halt to Bitcoin Purchases
The International Monetary Fund (IMF) has commended El Salvador for its strong fiscal performance and reserve accumulation. However, the IMF reiterated its stance that El Salvador should cease acquiring Bitcoin.
Despite previous calls to halt Bitcoin purchases, El Salvador has continued to acquire one Bitcoin per day. As of this writing, El Salvador holds 6,190 Bitcoins, valued at approximately R$ 3.8 billion, making it a notable example of state adoption of the cryptocurrency.
IMF Acknowledges El Salvador’s Monetary Policy Progress
The IMF has been closely monitoring El Salvador since the country initially adopted Bitcoin as legal tender. While Bitcoin is no longer legal tender in El Salvador, the IMF acknowledges the government’s progress in other areas.
In a recent statement, the IMF team praised El Salvador’s advancements. President Nayib Bukele responded to the report with emojis, highlighting the following excerpt:
“Program performance has been strong. All key fiscal and reserve targets were met with comfortable margins, and substantial progress continues to be made on the ambitious reform agenda in the areas of governance, transparency, and financial resilience.”
IMF Calls for End to Bitcoin Accumulation and Sale of Chivo Wallet
Despite El Salvador’s economic progress, the IMF remains concerned about the government’s involvement with Bitcoin. Although Bitcoin is no longer legal tender, El Salvador continues to build a strategic reserve of the cryptocurrency.
The IMF has stated that efforts should continue to ensure that the total amount of Bitcoin held by the government remains unchanged, in accordance with program commitments.
However, El Salvador continues to accumulate Bitcoins, with The Bitcoin Office reporting ongoing daily purchases of 1 BTC.
EL SALVADOR JUST BOUGHT MORE BITCOIN
Unlike many institutions, El Salvador publicly discloses its Bitcoin holdings, providing transparency to its citizens. Recently, President Bukele revealed the country’s profits from its Bitcoin investments.
Furthermore, the IMF recommends that the Salvadoran government divest its holdings in the Chivo wallet. The Bitcoin wallet was initially used to distribute R$ 150 in BTC to each citizen to encourage cryptocurrency adoption.
The IMF suggests that the sale of Chivo should be completed by the end of July. However, reports from 2021 indicate that the wallet contained vulnerabilities, which could complicate negotiations with private companies.
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