El Salvador Furiously Refuses to Abandon Bitcoin

El Salvador Furiously Refuses to Abandon Bitcoin

Created 1yr ago, last updated 1yr ago

"No international organization is going to make us do anything," the country's treasury minister says.

El Salvador Furiously Refuses to Abandon Bitcoin

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El Salvador has issued a more formal — and angry — response to the International Monetary Fund's pleas for the country to abandon Bitcoin as legal tender.

The Central American nation's treasury minister, Alejandro Zelaya, furiously told a local television channel:

"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."

Zelaya went on to add that El Salvador has taken great care to ensure that BTC transactions comply with money laundering rules.

President Nayib Bukele has sparked controversy by investing public funds worth tens of millions of dollars into Bitcoin — and making purchases from his smartphone on a whim whenever the cryptocurrency's value falls.

Last week, the IMF said BTC's use creates "large risks" when it comes to "financial stability, financial integrity and consumer protection" — and warned that El Salvador's public debt is currently on an "unsustainable path."

Some of the recommendations made by the IMF include abandoning the reward of $30 in BTC that is given to Salvadoran consumers who download the Chivo digital wallet.
While the IMF concedes that the Chivo wallet could play a significant role in boosting financial inclusion — an estimated 70% of the country's citizens are unbanked — it wants the app to only facilitate transactions in U.S. dollars and not Bitcoin. A report added:

"In the near-term the actual costs of implementing Chivo and operationalizing the Bitcoin Law exceed potential benefits."

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Bukele Dismissive

With a high-profile Twitter account as his weapon — and 3.5 million followers to boot — Bukele has wasted little time in dismissing the IMF's concerns, and challenging other critics such as the Bank of England.

When the IMF's warning first came to light, he simply responded with a meme from The Simpsons. And in recent days, he's been doubling down on Bitcoin's potential:

"There are more than 50 million millionaires in the world. Imagine when one of them decides they should own at least ONE Bitcoin. But there will ever be only 21 million Bitcoin. Not enough for even half of them. A gigantic price increase is just a matter of time."

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