The International Monetary Fund warned El Salvador to drop Bitcoin as legal tender. Not just once, or twice, but at least 4-5 times in the past. In fact, even the Executive directors urged El Salvador to detach Bitcoin’s status as legal tender in the country. What’s more, in a recent release, the IMF insisted that El Salvador dissolve its $150-million trust fund incorporated at the time of its policy decision.
Agree to disagree
El Salvador’s Finance Minister Alejandro Zelaya responded to recent demands from the International Monetary Fund. And, as expected, he remains undeterred from his ‘pro-BTC’ stance.
According to Zelaya, the IMF’s demands are an ‘insult’ to the nation’s sovereignty.
“El FMI reconoce avances de crecimiento económico, manejo de la pandemia e inclusión financiera, pero también resalta los problemas históricos del país. En 2 años no podemos traer atrás 40 años de mal manejo. Nunca habíamos crecido a un ritmo de 10.3%”, Ministro @AlejandroZelay9. pic.twitter.com/0Q3HGcMJil
— Diario La Huella (@LaHuellaSV) January 31, 2022
In a interview hosted by ‘Diario La Huella’, Zelaya opined,
“No international organization is going to make us do anything, anything at all. Countries are sovereign nations and they take sovereign decisions about public policy.”
Quite contrary to the “The evaluation of Article IV” published by the IMF.
The minister went on to add,
“We have reached 4 million users. It reduced transaction costs for Salvadorans abroad and within the country.”
In addition to this, the minister claimed that El Salvador has complied with all financial transaction and money laundering rules.
El Salvador’s President Nayib Bukele has dismissed the IMF’s recommendation on Bitcoin in the past. He remains hopeful and positive about Bitcoin and its value as a digital asset. In fact, he expects a “gigantic price increase” in the future as more wealthy individuals move in to acquire the flagship cryptocurrency.
In a tweet Bukele noted that there are more than 50 million millionaires in the world, while BTC’s supply is limited to 21 million coins.
“If every millionaire in the world one day owned at least one coin there won’t even be enough for half of them, which meant a gigantic price increase is just a matter of time.”
Needless to say, some did however criticize the aforementioned narrative. For instance, popular gold bug and crypto-skeptic Peter Schiff noted,
But why buy an entire #Bitcoin when a single Sat will do the job just as well (which is nothing.) A Bitcoin is merely an arbitrary bundle of one hundred million Sats. It's far more likely that millionaires who already own Bitcoin will sell! A gigantic price collapse is coming!
— Peter Schiff (@PeterSchiff) January 31, 2022
El Salvador’s Bitcoin investment has been hit hard due to the most recent market crash. In fact, it has led to a 31.8% unrealized loss for El Salvador after it poured $88.4 million into the asset.