The International Monetary Fund (IMF) said on Thursday that it has a number of economic and legal concerns about El Salvador's move to make bitcoin a legal tender, adding to the murky outlook for a requested deal.
El Salvador became the first country to adopt bitcoin as a legal currency, with President Nayib Bukele promoting its use as a tool to help Salvadoran expats send remittances home.
“The adoption of bitcoin as a legal financial mean raises macroeconomic, financial and legal issues that require very careful analysis,” said Gerry Rice, a spokesman for the IMF, add that the fund is closely monitoring developments and will continue consultations with the government.
El Salvador's law means that bitcoin will be par with the dollar, which became its official currency two decades ago.
Worried about the future of an IMF deal, investors demanded increasingly higher premiums to hold on to El Salvador's debt.
“We see bitcoin in El Salvador as noise that could complicate discussions with the IMF,” said Donato Guarino of Citi.
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