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El Salvador doubles down on Bitcoin, defies IMF concerns
Crypto community members have advised the Central American country's to reject the IMF recommendations.
2 min read
Updated: Oct. 22, 2024 at 1:27 pm UTC
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El Salvador has doubled down on its Bitcoin moves despite ongoing pressure from the International Monetary Fund (IMF) regarding the country’s use of the digital asset.
On Oct. 4, Juan Carlos Reyes, President of the National Commission on Digital Assets (CNAD), announced that the Central American country’s lawmakers had passed “important amendments to the CNAD law.”
Bitcoin moves
According to him, these changes grant the CNAD authority to regulate Bitcoin companies in the country.
Further, the CNAD will now be the primary regulatory body overseeing the nation’s Bitcoin industry. It will also implement a risk-based regulatory framework to position El Salvador as a global digital asset adoption and regulation leader.
Reyes added:
“Our team [will] combine regulatory knowledge with practical Bitcoin experience, ensuring a balanced and effective approach.”
Reyes also mentioned that more information on the proposed regulatory framework will be shared in the coming weeks.
In a parallel development, the National Bitcoin Office (ONBTC) of the Office of the President of El Salvador stated that the country was building new capital markets on the bellwether digital asset.
According to ONBTC:
“Only on bitcoin can an individual ever self-custody their wealth and property. Capital will never form upon chains designed for velocity rather than sovereignty.”
IMF’s recommendation
These moves came after the IMF once again expressed concerns about El Salvador’s Bitcoin initiatives.
Julie Kozack, Director of the IMF Communications Department, stated that the country’s stance on Bitcoin remains an ongoing topic of discussion. She said:
“What [IMF] has recommended is a narrowing of the scope of the bitcoin law, strengthening the regulatory framework and oversight of the bitcoin ecosystem, and limiting the public sector exposure to bitcoin.”
Interestingly, this recommendation follows the IMF’s earlier acknowledgment that some risks associated with El Salvador’s Bitcoin involvement have not yet materialized.
Despite the IMF’s caution, many in the crypto community have advised the country to ignore this advice. Mathew Sigel, head of digital assets at VanEck, accused the IMF of holding El Salvador “hostage” over its pro-Bitcoin stance despite the nation’s economic and societal progress.
Instead, Sigel encouraged President Nayib Bukele to “stand firm” as his “vision is driving a remarkable transformation.”
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
VanEck
VanEck is a global investment manager with offices around the world, including New York, Australia, China, Germany, Netherlands and Switzerland.
Nayib Armando Bukele Ortez is a Salvadoran politician and businessman who is the 46th and current President of El Salvador.