Bitcoin: UN experts warn of “significant risks”

Deepak Gupta January 27, 2022
Updated 2022/01/27 at 6:51 AM

Still is Bitcoin (BTC) positioned as the cryptocurrency with the greatest market power. However, this has been declining for some time now, while assets such as Ethereum (ETH) are on the rise. However, the high volatility is also directly reflected in the current value development on the market. Nevertheless, El Salvador’s President Nayib Bukele is sticking to Bitcoin.

IMF warns against Bitcoin

The International Monetary Fund (IMF), a special organization of the United States (UN), is primarily intended to help out any country with loans that do not have sufficient currency reserves. However, the organization also advocates closer international cooperation on monetary policy and occasionally offers technical assistance. In the eyes of the IMF experts, what is currently going on in El Salvador poses a not insignificant risk. The reason for this is also the volatility of Bitcoin.

As early as September 7, 2022, Bukele announced that Bitcoin would become the country’s legal currency. The first protests began a little later and the international financial world is still staring spellbound at the Central American state.

“However, adopting a cryptocurrency as legal tender comes with major risks to financial and market integrity, financial stability and consumer protection. It can also create contingent liabilities.”

International Monetary Fund (IMF)
International Monetary Fund (IMF)

Bukele reacts calmly

The IMF Executive Board called on El Salvador authorities to “restrict the scope of the Bitcoin Law,” according to a press release from the organization. Some members have also expressed concern about the risks involved in issuing bitcoin-backed bonds.

Bukele is currently not making any moves to turn away from Bitcoin. He constantly keeps the public up to date on his financial decisions and the progress of his planned “Bitcoin City”. On the warning of the IMF reacted El Salvador’s President on Twitter with a meme.

Source: International Monetary Fund; Twitter/@nayibbukele

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