Tech this week: El Salvador rejects IMF call to drop Bitcoin use and Snap shares surge 50%
The government of El Salvador on Monday rejected a recommendation by the International Monetary Fund (IMF) to drop Bitcoin as legal tender in the Central American country.
Treasury minister Alejandro Zelaya angrily said that “no international organisation is going to make us do anything, anything at all”.
Zelaya told a local television station that Bitcoin is an issue of "sovereignty”.
“Countries are sovereign nations and they take sovereign decisions about public policy,” he said.
The IMF had urged El Salvador to drop Bitcoin as legal tender and better regulate the digital wallet the government created and promoted to its citizens at the end of January.
"The adoption of a cryptocurrency as legal tender, however, entails large risks for financial and market integrity, financial stability and consumer protection,” it said in a statement.
Zelaya said El Salvador has complied with all financial transaction and money laundering rules.
The IMF also recommended eliminating the offer of $30 (€26.19) as an incentive for people to start using the digital wallet Chivo and increasing regulation of the digital wallet to protect consumers.
It suggested there could be benefits to the use of Chivo, but only using dollars, not Bitcoin.
“In the near-term the actual costs of implementing Chivo and operationalising the Bitcoin law exceed potential benefits,” the report said.
Salvadoran president Nayib Bukele had been dismissive of the IMF’s recommendations concerning Bitcoin.
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Government officials told the IMF that the launch of Chivo had significantly increased financial inclusion, drawing millions of people who previously lacked bank accounts into the financial system.
They also spoke of the parallel
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