IMF urges El Salvador to intensify efforts to improve Bitcoin transparency, alleviate risks
(MENAFN) The International Monetary Fund (IMF) has urged El Salvador to intensify its efforts to improve Bitcoin transparency and address associated risks, according to a report released on Wednesday. The IMF highlighted that while many risks related to Bitcoin have not yet manifested, there is a shared recognition that further action is necessary to enhance transparency and manage potential fiscal and financial stability risks linked to the cryptocurrency initiative. The report emphasized the need for additional discussions on these and other critical issues.
El Salvador made history in September 2021 by becoming the first country to adopt Bitcoin as legal tender. Since then, the Central American nation has made strides in developing a plan to gradually bolster its financial system reserves while maintaining private sector credit and growth. This effort is complemented by attempts to reduce the government's dependence on domestic financing, with potential support from the IMF and other multilateral development banks.
The IMF noted that El Salvador is working towards improving its primary fiscal balance by approximately 3.5 percent of GDP over a three-year period. This goal is aimed at ensuring that public debt remains on a sustainable trajectory, reflecting the country’s commitment to strengthening its financial stability in the face of ongoing economic challenges.
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