The International Monetary Fund sees financial and legal problems with El Salvador's grand decision to become the first country in the world to adopt Bitcoin as legal tender, Reuters reports.
IMF spokesman Gerry Rice says the organization will closely monitor those developments, adding that cryptocurrencies can carry "significant risks":
"Crypto assets can pose significant risks and effective regulatory measures are very important when dealing with them."
President Nayib Bukele said that this Thursday he would have a Bitcoin-related conversation with the IMF.
El Salvador has been in talks to obtain a $ 1.3 billion loan from the IMF to stimulate its economy after Bukele's landslide victory in early March.
The first domino to fall
El Salvador passed Bukele's Bitcoin bill with a supermajority earlier this week, which was widely seen as a watershed moment for the entire cryptocurrency industry.
Once the decree takes effect, the law will require all merchants to accept Bitcoin. Products can also be traded in cryptocurrencies or in US dollars. Bitcoin is now listed as the official currency of the tropical country, along with the US dollar on its Wikipedia page.
Immigrants can obtain permanent residency by investing 3 BTC ($ 110,723 at press time) in the country's economy (any product or service).
As reported by ForexNews.online, El Salvador also plans to take advantage of the geothermal energy generated by its volcanoes for renewable cryptocurrency mining.
At the same time, Bukele mentioned that his nation was not seeking de-dollarization with its move to Bitcoin. The prominent podcaster Preston Pysh states that El Salvador's actions in response to the IMF will be "very demonstrative":
"In a similar way to how the global central banks have encouraged the citizens of the world to borrow up to their eyes, the IMF does the same but for the nation states … Look at the actions of El Salvador here … it will be extremely demonstrative."