IMF Highlights El Salvador’s Need for Greater Transparency
Following a recent visit, the International Monetary Fund (IMF) stressed the value of openness and care in El Salvador. In the month prior to the IMF’s “article IV” inspection, which took place between January 30 and February 8th, the nation paid $600 million in bonds.
IMF’s Position on El Salvador Using Bitcoin
The IMF has acknowledged that some of the primary dangers connected with the decision have been averted, despite the fact that it disagrees with El Salvador’s choice to accept Bitcoin as legal cash. The group has cautioned the nation against continuing its pursuit of monetary autonomy in the absence of its own currency, though.
Regulation of Digital Assets in El Salvador
On January 11th, El Salvador’s congress enacted a legislation governing the issue of digital assets by public and commercial institutions. The nation also intends to utilize these bonds to construct a “Bitcoin City” linked to a nearby volcano in order to mine clean Bitcoin using the volcano’s electricity.
Holdings of Bitcoin in El Salvador
El Salvador’s total Bitcoin holdings have fallen by 57% from their highest value despite the country declaring its adoption of Bitcoin as legal cash and making an initial purchase of several hundred Bitcoin in September 2021.
Economic Assessment of El Salvador by the IMF
Despite these worries, the IMF recently reported that El Salvador’s economy has fully recovered to pre-pandemic levels. According to the group, the nation’s real GDP will increase by 2.4 percent in 2023, above the historical norm.