IMF advises El Salvador: "Limit Bitcoin law"

According to the International Monetary Fund (IMF), Bitcoin is a risk for El Salvador. That reports Reuters, citing an IMF-organized press conference. "We recommended limiting the scope of the Bitcoin law, strengthening the regulatory framework and oversight of the Bitcoin ecosystem and limiting public sector involvement in Bitcoin," a spokeswoman said.

Criticizing the recommendation is Platform X's Metthew Sigel, Head of Digital Assets Research at VanEck, defends El Salvador's Bitcoin strategy: "Gross domestic product has increased by more than 10 percent since the introduction of Bitcoin, outperforming regional competitors. The murder rate is down 95 percent and tourism is up 95 percent by 2023."

Although tourism has risen sharply since Bitcoin's legalization, these figures cannot be independently verified. Moreover, the drop in crime probably has more to do with the government's crackdown on gang crime than with BTC. The country's largest prison, the Centro de Confinamiento del Terrorismo, currently houses more than 14,000 prisoners.

More than three years ago, President Nayib Bukele made Bitcoin legal tender in El Salvador. At the same time, he began buying BTC regularly to increase the state's reserves. Since then, the country has been buying one BTC every day and, according to the "Nayib Bukele Portfolio Tracker" realized a fiat profit of more than $52 million with this strategy.

Currently, El Salvador holds a total of 5,892 BTC worth about US$360 million. Since March, the BTC have been securely stored in a hardware wallet, for which Bukele named a public wallet address.