The IMF has advised El Salvador against trading BTC bonds because of how risky it reportedly is for the country’s economy.
The International Monetary Fund made this announcement following recent regulatory actions taken by El Salvador to increase the adoption of virtual currency.
Recently, the organization’s representatives visited the Central American country to sit down with financial representatives from El Salvador. As stated by the IMF, the risks associated with Bitcoin adoption as a legal tender didn’t make their appearance yet. After the country approved new laws to encourage the use of cryptocurrency and Bitcoin bonds, other risks could appear too.
In January 2022, El Salvador’s Legislative Assembly passed a new law to regulate the issuance of crypto assets, other than Bitcoin. The Ministry of Economy’s bill is just the latest of many rules for virtual assets. El Salvador now has the legal framework in place for transfers and operations of crypto assets, such as token issuance and their public offerings.
The recent law also led to the creation of a national commission for virtual assets which will act as the supervisor of the new securities law and bear the responsibility over the rights of issuers and buyers of crypto assets. Furthermore, the bill provided the rules for creating bitcoin bonds, which are to be issued by the country’s government. The Central American country wishes to create USD 1 billion worth of BTC bonds to acquire Bitcoin and develop the much-awaited Bitcoin City.