IMF Works with El Salvador on Bitcoin Risk Management

The International Monetary Fund (IMF) is collaborating with El Salvador to address the financial risks linked to its Bitcoin adoption.

The aim is to create a solid plan to stabilize and grow the economy while managing Bitcoin as legal tender.

The IMF’s recent update, following discussions led by Raphael Espinoza, highlighted a focus on improving public finances, enhancing bank reserves, and increasing financial transparency.

The organization emphasized the need for El Salvador to boost its fiscal balance by 3.5% of GDP over three years, optimizing public spending on services and infrastructure.

READ MORE:

Analyst Predicts Bitcoin Will Rapidly Recover from Recent Drop

Both parties acknowledged potential risks from Bitcoin, including concerns about fiscal stability and transparency. They agreed on the need for further measures to address issues like corruption and money laundering.

El Salvador, which began using Bitcoin as legal tender in September 2021 under President Nayib Bukele, is committed to its Bitcoin strategy despite earlier IMF warnings. The country continues to buy Bitcoin daily through a Dollar Cost Averaging approach and currently holds about 5,835 BTC, valued at roughly $334 million.

Alexander Stefanov