Bitcoin faces risks as it becomes legal tender in El Salvador

El Salvador’s adoption of bitcoin as legal tender could involve a series of regulatory risks and complicationsGerry Rice, spokesperson for the International Monetary Fund, said Thursday.

“The adoption of bitcoin as legal tender raises a series of macroeconomic issues, financial Yes legal they require very careful analysis, so we are monitoring developments closely and will continue our consultation with the authorities, ”Rice said, speaking in Washington.

“The cryptocurrency assets can present significant risks and it is very important that there is regulatory measures effective in treating them ”.

El Salvador approves use of bitcoin as legal tender

IMF team holds virtual meetings with El Salvador on its review of the country’s Article IV and a possible credit program “which includes policies to strengthen economic governance,” Rice said. The team will meet Bukele on Thursday.

El Salvador’s Congress this week approved a law requiring companies to accept bitcoin in exchange for goods and services. President Nayib Bukele said the digital currency would help counter El Salvador’s low banking penetration and lower the cost of remittances.

The bonds of the cayero nationn, raising the yield on its 2025 bonds by 71 basis points to 7.8% at 10:40 a.m. in New York.

Salvadoran bonds are worst performing in emerging markets this week, according to a Bloomberg Barclays Index.

“Bitcoin projects under an increasingly autocratic regime are likely only to increase concerns about corruption, money laundering and the independence of regulators,” he wrote in a note. Siobhan morden, Director of Bond Strategy for Latin America at Amherst Pierpont.