IMF Urges El Salvador To Reconsider Bitcoin Policies

According to Cointelegraph, the International Monetary Fund (IMF) has renewed its calls for El Salvador to scale back its Bitcoin (BTC) policies and overhaul the regulatory framework surrounding the digital asset. During an Oct. 3 press conference, Julie Kozack, the director of the IMF communications department, emphasized the need for a narrowing of the scope of the Bitcoin law, strengthening the regulatory framework and oversight of the Bitcoin ecosystem, and limiting public sector exposure to Bitcoin. However, she did not specify the exact details behind the proposed regulatory shift. Since El Salvador legalized Bitcoin as a form of legal tender in 2021, the IMF has consistently pressured the South American country to step away from Bitcoin and embrace traditional financial infrastructure. In August 2024, the IMF reiterated these demands but acknowledged that many of the purported risks of Bitcoin adoption had not yet materialized. The IMF's hostility toward Bitcoin is well-known, as it continues to advocate for traditional fiat currencies despite their global devaluation. In 2023, the IMF provided technical consulting to help Andorra record and monitor Bitcoin transactions. Later, in March 2024, the organization suggested that Pakistan institute a capital gains tax on crypto to qualify for a $3 billion loan. More recently, IMF executives proposed taxing energy used for crypto mining to reduce carbon emissions. This added tax could increase energy costs for miners by 85%, posing a significant challenge for an industry already grappling with post-halving economics and increased mining difficulty. While the IMF continues to oppose Bitcoin and non-state-controlled cryptocurrencies, it is simultaneously promoting central bank digital currencies (CBDC) globally. In September, the IMF released the REDI framework for CBDC development, which stands for regulation, education, design, and incentives. These initiatives aim to help central banks make CBDC adoption more acceptable to prospective populations.