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IMF – Not a fan of cryptocurrencies

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IMF is another addition to the list of anti-crypto organisations. The IMF has taken a proactive stance in El Salvador’s Bitcoin plans. With the addition of another major players list in the crypto-debate, what would it mean for cryptocurrencies’ future?

As El Salvador becomes the first country in the world to recognize Bitcoin as legal tender, the president’s ambitious plans for cryptocurrencies are revealed. Being a legal tender, Bitcoin has been mandated to be used by retailers and businesses as a mode of payment with an exemption for those who do not have access to an internet connection. Prices can now be pegged in Bitcoin and no capital gains tax is to be levied on Bitcoin.

Apart from being recognized as a legal tender, president NayibBukele has also revealed instructions to the state-owned energy company LaGeo to make arrangements for Bitcoin mining with renewable energy. El Salvador cannot meet its own energy needs and Bitcoin mining will definitely put a strain on the already-struggling energy industry.

The plans of El Salvador for Bitcoin have now involved the International Monetary Fund as well. The IMF is not supporting El Salvador’s position citing Bitcoin can lead to larger macroeconomic instability in the country – the spokesperson of IMF, Gerry Rice, revealed in a press conference. Per the spokesperson, the IMF will be closely following the developments in El Salvador and will keep close contact with the authorities.

The IMF’s general stance on cryptocurrencies is not favorable as well. The organization regards cryptocurrencies as a threat to the existing regulatory frameworks and are cited to complicate things. The IMF’s involvement in El Salvador may stop other countries from following suit with El Salvador. The lending agency’s power in the international sphere is not something up for debate.

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