IMF: Risks of Bitcoin legalisation in El Salvador have not materialised

The risks of legalising Bitcoin in El Salvador have “not materialised” due to the “limited” spread of the cryptocurrency. IMF experts said.

“Although [Bitcoin-related] risks did not materialise due to the limited use of the asset—as survey and transaction data show—its use could expand […]. In this context, the main risks to financial integrity and stability, fiscal sustainability and consumer protection remain,” the press release says.

The IMF’s staff presented their preliminary conclusions following a visit to El Salvador for consultations under Paragraph IV Статей соглашения МВФ.

The IMF emphasised that the authorities should “reconsider their plans to expand the government’s exposure to Bitcoin”.

The staff also noted that they could not assess the scale of El Salvador’s investment in the asset due to the government’s “non-transparent” actions.

Meanwhile, analysts said the country’s economy had “fully recovered” to the level it possessed before the onset of the coronavirus pandemic.

Earlier, in January 2023, the Salvadoran Congress passed a law providing the legal framework for issuing digital assets, including Bitcoin-based bonds.