The International Monetary Fund (IMF) has issued a notice asking El Salvador to remove its status as a payment method for Bitcoin (BitfinexUSD).
In a statement released at dawn on January 26, International Monetary Fund (IMF) officials urged El Salvador to stop recognizing Bitcoin as currency.
The IMF believes that “the use of Bitcoin poses significant risks to financial stability, transparency and consumer protection, as well as associated fiscal burdens.” In addition, some senior IMF figures also expressed concern about El Salvador's plan to issue "Bitcoin bonds".
The IMF's recommendation comes as the organization and El Salvador are negotiating for a loan of up to $1.3 billion.
El Salvador was the first country in the world to recognize BTC as currency in September 2021. The country's president, Nayib Bukele, has since made pro-BTC moves on social media and developed plans to bring Bitcoin into the Latin American nation's economy.
However, with the cryptocurrency market correcting recently, Bukele's Bitcoin "bottom-fishing" investments are said to be losing heavily. President Nayib Bukele is said to have invested $85 million in 1,800 Bitcoins and is losing nearly $20 million.
Bitcoin drops to 6-month low as market abandons risk assetsThe crypto market has plummeted over the past week, following the biggest swings in the US stock market since the initial coronavirus shock in March 2020, with market participants shifting away from financial assets. Riskier assets as the US Federal Reserve marks strong interest rate hikes and quantitative tightening this year to address mounting inflationary pressures.
Over the past week, Bitcoin has dropped 14% to a 6-month low of $36,202, Ethereum is down 25% to $2,400, Binance Coin has lost 23% to $363, Cardano has dropped 34% to $1,038, Ripple has lost 20.8% to $0.603 and Solana plummeted 35% to $89.72.
