IMF: Bitcoin adoption in El Salvador less dangerous than thought

The International Monetary Fund (IMF). a report released praising the Central American country of El Salvador for its limited use of bitcoin (BTC) as a means of payment. The report suggests that the limited use of the cryptocurrency in the country has prevented the predicted risks that would come with widespread use of BTC.

Bitcoin adoption in El Salvador

El Salvador made headlines in 2021 when it became the first country in the world to introduce bitcoin as legal tender. Since then, the country has taken steps to promote limited use of the cryptocurrency, mainly in small businesses and for money transfers. These measures include information campaigns for traders and consumers, but also the development of its own bitcoin wallet: Chivo.

In the report, the IMF highlights the successful implementation of these measures, noting that the limited use of bitcoin in El Salvador has prevented risks to financial stability. This while the IMF used to still warned for great dangers, BTC was allowed to be widely used in the country.

However, transparency regarding BTC transactions and the use of the Chivo wallet must be a priority. If this is neglected at some point, the consequences can be enormous, said the IMF:

“More transparency about government transactions in bitcoin and the financial situation of the state bitcoin wallet (Chivo) remains essential,”

The IMF is slowing down

The IMF’s report on El Salvador’s limited use of bitcoin comes at a time when the global financial community is becoming increasingly interested in the possibilities of cryptocurrencies. For example, many central banks are exploring the option of launching their own digital currencies, and the G20 has set up a working group to study the potential benefits and risks of cryptocurrencies.

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The IMF report on El Salvador’s limited use of bitcoin suggests that a responsible approach to adopting cryptocurrencies can mitigate the risks of its widespread use and maximize its potential benefits.

Of course there are still to question in the actual implementation in El Salvador. In any case, the local population seems to want to know little about bitcoin.

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