Will El Salvador Faces Bitcoin Adoption Risks? IMF issued a strong warning
El Salvador the first country to adopt Bitcoin as legal tender recently received a warning note from IMF for the risks and implications behind it Bitcoin adoption.
September this year will be the third year El Salvador's President Nayib Bukele made Bitcoin legal tender In the country. As a result of that, all businesses and Enterprise adopt the use of Bitcoin as mode of payment within the country. However, this move has caught many country attention to the use of crypto. Even in November last year, the president announced the strategy to accumulate more bitcoin, by buying one bitcoin per day.
Bitcoin loss 50% of its value make El Salvador lost $26 million in paper money. Bukele then established a legal framework called “Volcano Bond” in January 2023 to reduce the nation's debt. El Salvador keep reliance on bitcoin and that's why IMF send a strong warning to the country that if care is not taking bitcoin could make the country more susceptible to money laundering and other illegal activities that could be a threat to el salvador stability.
IMF therefore call the El Salvador's government attention against the expansion to cryptocurrency and the need for more transparency and caution.
I can't say this is bad advice for the El Salvador's authorities, Because truely the way President Bukele handle the use of Bitcoin within the country it will make the economic of the country to be more expose to bitcoin. I think IMF is right and concerns about the nature and legal risk in cryptocurrency market and ask them to be cautious
Cryptocurrency is good assets but will there be a risks if El Salvador continue to grow it economy reliance on cryptocurrency but failed to pay attention to integrity its budgetary and financial system.
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El Salvador is on track to become self sufficient by replacing the IMF with Bitcoin. El Salvador and its president are going to be revered as those with great wisdom and forethought as the next bull run continues and Bitcoin trends higher in value over time.
I also think of this idea too, they're trying to replace IMF with Bitcoin and generate their income from cryptocurrency, but this idea will only benefit if Bitcoin is totally in bull run
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They better be careful. Someone is going to have to send an army in their to free the people from their blockchains :-)
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They have to understand the nature of cryptocurrency is not 100% and this can easy breakdown the financial system of the country. Although I like the idea of making Bitcoin legal tender within the country, but too much exposure to it might cause a lot of damage