[Update] IMF urges El Salvador to remove Bitcoin as legal tender

[franky1]

They are a huge organization that relies on dollars and so that's the reason why they're putting their trust in it instead of letting El Salvador do its thing alone, they want to intervene as it seems doesn't look for them. What's the matter if a country wants to adopt it as a legal tender and they actually have passed it and went through a process and made a bill for it. I think this is one of the reasons why many countries don't like to stand with these international orgs because they are trying to interfere with anything with almost everything.

the IMF have nothing to do with "trusting the dollar". their game is to set terms and conditions on countries that take loan dollars that allow the IMF to try punishing a country.

EG imagine(in simple human fiat terms)
 you took out a bank loan at 1% interest, but the terms&conditions was that you had to prove you worked for an employer paying you dollar to stay at the 1% rate. if found that you accepted euro income your interest rate becomes variable. and you also can have other penalty fee's added.
imagine on top of that you had to ensure that because your house was the collateral. you had to use 50% of the loan to renovate the home and pay your kids in a weekly pocket money allowance in dollars.
all of this is to try keeping you tethered to the dollar and need to generate MORE dollars to stay afloat and repay the loan.

what they dont want is for you to just start earning euros and claim dollar bankruptcy while holding euros offshore out of their jurisdiction, thus unable to seize your euro wealth.
yes the IMF should get out of the game of trying to make it appear that the dollar is no.1 power/dependant currency. realise only 320m of 8bill (<5%) actually use it.. but then the IMF wont want to advertise that china and india are the actual big players. circulating their currency through billions of people(>12% each)
heck im in the UK and i dislike that bitcoin exchange rate values bitcoin against the dollar. where the UK exchange then 'follows' the US rate, by looking at the forex and converting to then show a UK price..  rather than the UK have its own independent rate.
heck even stable coins are $ denominated. rather than having multiple stable coins for pounds, euro's etc.
so even the bitcoin exchanges has become dollar sheep.

if the bitcoin exchange was not so US centered. people could see a change in the forex rate. and buy bitcoin. sell at dollar rate then use dollars to arbitrage a USD to GBP. and through this arbitrage, bitcoin could actually ruin the wall street forex rate of dollar by 'selling' all the dollar for pounds. thus crashing the wallstreet dollar forex market.
but due to fears of influence. bitcoin exchanges dont do this, so stay 'happy friends' with us government.

imagine if in 2011 when exchanges first started. all exchanges valued bitcoin to chinese Yuan instead.. the US government would not be happy

[BJ2gCFtGbiVK]

yes, media has over sold "bitcoin legal tender" as if el salvador has dropped the dollar. this is not the case. its instead added a second legal tender. adding options.
though at the moment the adoption and regular utility of this second option isnt much. the IMF fears the potential.
the potential is if the citizens moved their wealth over to bitcoin, and just stopped using dollar. then the IMF is screwed and wont get its debts to el salvador settled. though not a immediate threat. not a short term risk. the IMF is concerned about long term risk of long term loans not being repaid should el salvadorians prefer to use bitcoin instead of dollar

..
similar things were happening with UK/euro. because the UK didnt want to use the euro as a native currency. the euro banks didnt want to offer the UK euro loans. because if the UK is not circulating euro's then the euro banks have little chance of the UK generating enough euro to repay. thus allowing the UK a back door to exit out of by just claiming euro bankruptcy. whilst keeping the pound active for citizens in the UK

.. well then brexit happened and we left by another door. as we refused to join the euro, when asked again to drop the pound.

UK had a brexit. to cut ties with eurobank
i wonder if/when el salv' will do a IMF***off

Media aren't alone in the misrepresentation, and the problem is that a second legal tender hasn't really been added. The app defaults to USD, limits or makes bitcoin withdrawals outright impossible and provides no infrastructure for decentralisation. It does little more than create a platform that could easily be adapted to any CBDC or basket of CBDCs, as well as an extensive facial recognition database.

If the use case is increasing remittance income, that's more understandable, but you'd hope that any country would be attempting to minimise dependency on that revenue stream. The absence of young people here is striking.

I continue to believe that mobile-first lightning development is a net negative for bitcoin. At this point, my order of preference is:
1. Bitcoin for long-term savings
2. USD cash for spending
3. USD debit card for spending
4. Full-node based Lightning on desktop, non-LND implementation
5. Lightning mobile apps tied to ID/facial recognition (I don't want to use these at all)

[franky1]

i have my own thoughts on the issues with el salvadors lightning use app instead of a bitcoin wallet.
i wont go into detail as many people of a certain group will come advertising their LN utopia's

but yes bitcoin is legal tender. and while utility of adoption is slow. especially of actual bitcoin acceptance(savings on bitcoin wallets) it is atleast one half step away from the dependants on the dollar.
(once all these covid travel restrictions calm down. i was planning a trip to el salvador to see how things are and what can be done to progress things)

however huge leaps to just cut off any dollar utility and make everything measured in bitcoin is not going to happen. but atleast giving people a address they can tell their relatives aboard to send funds to can bypass the US$ banking remittance headaches. as an extra option

its not something that has been around for years. it only became law in september (4 months ago) so it will take time.

heck the UK has taken 4 years to get from voting on brexit to a point where it actually activated. and then another 2 years to get used to all the law changes of brexit.. yep 6 years since the vote and its still not settled/normalised

so it will take longer then 4 months for people to get used to having another option. .. baby steps not huge leaps

[bbc.reporter]

The IMF and the cronies running it are scared.  Of course they want El Salvador to drop bitcoin because it takes control from the surveillance state kleptocrats and puts it in the hands of people.  Does El Salvador want to eventually be free of the international control freaks or does it want to be under their thumbs in perpetuity?

The answer should be: keep bitcoin and give it time.  The IMF has destroyed countries world wide with the insane policies it has recommended, trusting them now is like trusting any fiat currency to retain value.  As inflation in the US showed last year, they can't do it.  Bitcoin can over time.

I disagree. This is a warning and this should never be underestimated. The people who are behind our present monetary system are ruthless and cold blooded monsters. They will do anything to protect the exisiting state of their monetary system. Bukele’s presidential term will end on 2024 with a chance to win again on the next election for another 5 years. It would not be very shocking if we witness a coup d’etat or something worse unless El Salvador removes legal tender status. Those cold blooded monsters work on a different set of rules.

However, if Bukele does not listen and the countries in all of South America unite under the acceptance of bitcoin as legal tender, the IMF will begin to be running it scared hehehehe.

[BJ2gCFtGbiVK]

i have my own thoughts on the issues with el salvadors lightning use app instead of a bitcoin wallet.
i wont go into detail as many people of a certain group will come advertising their LN utopia's

but yes bitcoin is legal tender. and while utility of adoption is slow. especially of actual bitcoin acceptance(savings on bitcoin wallets) it is atleast one half step away from the dependants on the dollar.
(once all these covid travel restrictions calm down. i was planning a trip to el salvador to see how things are and what can be done to progress things)

however huge leaps to just cut off any dollar utility and make everything measured in bitcoin is not going to happen. but atleast giving people a address they can tell their relatives aboard to send funds to can bypass the US$ banking remittance headaches. as an extra option

its not something that has been around for years. it only became law in september (4 months ago) so it will take time.

heck the UK has taken 4 years to get from voting on brexit to a point where it actually activated. and then another 2 years to get used to all the law changes of brexit.. yep 6 years since the vote and its still not settled/normalised

so it will take longer then 4 months for people to get used to having another option. .. baby steps not huge leaps

There is certainly inefficiency in remittances and that's an opportunity for bitcoin, but it's naive to think that all KYC/AML is unnecessary and open borders are the answer to every problem. Again, I would hope that the intention is to reduce dependency on remittances by creating opportunity through projects like EBB1.

Lightning is certainly not ready for any nation-state use as primary legal tender. What's more concerning is that mobile-first development will lead to greater network centralisation and a lack of full nodes to balance the extra usage. That's partly why I think the IMF request is not unreasonable, and may be a benefit both to El Salvador and to Bitcoin.

I found a shop here selling the Raspberry Pi 4 B and asked if sales had gone up since the introduction of bitcoin. The question was met with a blank stare and a no.

[bittraffic]

El Salvador is already into deep with BTC, they will back away from the use of BTC. What would that make Bukele if he suddenly stops using BTC?

He'd just treat this as an insult from IMF. He wouldn't bow down to IMF again. No one can stop them because they can also use the stablecoin in crypto or they could be looking at what the Caribean Islands is using which is a CBDC.

[pushups44]

This is an almost predictable move by the IMF and only reinforces that the organization is uninterested in creating a level playing field for developing nations. Fortunately El Salvador has a strong-willed President in Bukele who won't buckle to this pressure. The IMF and international community should just let El Salvador continue with this experiment and see if it's viable for other nations before issuing this type of rhetoric.

[GatotKaca]

This is an almost predictable move by the IMF and only reinforces that the organization is uninterested in creating a level playing field for developing nations. Fortunately El Salvador has a strong-willed President in Bukele who won't buckle to this pressure. The IMF and international community should just let El Salvador continue with this experiment and see if it's viable for other nations before issuing this type of rhetoric.

El Salvador should be an excellent study for the world's financial institutions in dealing with bitcoin and crypto.
how the results and development of this country with the adoption of bitcoin there. whether it will be a more advanced future financial solution or vice versa.
looks like the IMF also lost their experts. or those who are starting to fear a more modern financial system.

[DapanasFruit]

Should El Salvador eventually drop Bitcoin as a legal tender because of the mounting pressures from different sides including IMF...this can be a sign that Bitcoin is actually a failure as far becoming a currency for a nation. We have to understand that actually there is no avalanche of people in El Salvador that are holding big amount of BTC...most are just getting the minute giveaway from the government so it is the government that is losing the value of its BTC holding...and of course they can lose only if they let their BTC go or be sold in today's price. I would be sending Bukele a big card of congratulations if he will not listen to naysayers waiting for the time when BTC can be rebounding - and it will surely come back just a matter of when not if.

[stompix]

Let's see how the price will also react to more negative news.

I waited to see how this unfolds, but it seems like that huge drop a few days ago was already away too much and caused by nothing in reality so the obvious bounce negated everything that could have come from this.

From what I know they cannot dictate what a country/government has to do (unless it's the condition for a deal, but here it's not the case).
Hence I expect Nayib Bukele see it as an opportunity to play macho and say he doesn't give a fuck on IMF.

The real problems will come only if El Salvador will get to the point they cannot continue without financial help from outside.

The real problem is already here and despite Bukele playing macho on Twitter, in reality, Salvador is still discussing with the IMF a 1.3 billion loan, that on top of the 400 million bonds they've issued in December to cover the current deficit.
Bukele right now is acting as any politician would have to do, in public, he posts laser eyes and says fuck the IMF in order to secure help from cryptocurrency lovers for his 1 billion bonds and to gain media support, behind the door he negotiates with both the IMF and the US to get along and the continuation of the USAID program.

Everybody right now needs money, there is almost no country without a stringent need of funds and Salvador is in a peculiar situation, they can't print their own, so the only help they can hope for is either temporary with loans or through investments but that will take too much time.
Bukele is trying to solve the cabbage goat wolf problem as he runs out of time.

The IMF and the cronies running it are scared.  Of course they want El Salvador to drop bitcoin because it takes control from the surveillance state kleptocrats and puts it in the hands of people.  Does El Salvador want to eventually be free of the international control freaks or does it want to be under their thumbs in perpetuity?

If the IMF is that scared and Salvador wants to be free, why does Salvador still insist to get a loan from them?

[Kemarit]

#BREAKING IMF urges El Salvador to remove Bitcoin as legal tender

Source --> https://twitter.com/AFP/status/1486051087736094729?s=20

I don't want to be pessimistic but still El Salvador wasn't ready to adopt Bitcoin, now with the price dropping and the pressure mounting, do you think El Salvador is ready to continue to adopt Bitcoin as legal tender?

Let's see how the price will also react to more negative news.

It is what it is, pressures from a entity that wanted to have control of countries. They want El Salvador to be dependent of IMF that's why they are putting a lot of pressure on them.

I just hope that El Salvador or at least the current sitting President will not give up on Bitcoin. This is just the beginning, yeah, tough times because we are in a bear market, but who knows, maybe 2-3 years from now, their investors will grow X folds.

[Darker45]

This has been a repeated call. But it seems the president is adamant on his government's new policy.

I don't understand the IMF, though. Why do they have to treat the country's adoption of Bitcoin as a big deal? It is not as if the country of El Salvador is ditching fiat for Bitcoin. It is not as if El Salvador is removing the USD as a legal tender. The USD is still the country's official currency. Bitcoin is indeed a legal tender but it is probably there playing the role of an alternative. I haven't been there myself but I doubt it's acceptance is widespread across the country.

[NeuroticFish]

The real problem is already here and despite Bukele playing macho on Twitter, in reality, Salvador is still discussing with the IMF a 1.3 billion loan, that on top of the 400 million bonds they've issued in December to cover the current deficit.

Woah. Then it won't be easy...
IMF is hard to convince out of their conditions - possible, but hard. I am curious what can he sacrifice to keep them happy.
I really hope that my worse expectations there won't happen.

[Anonylz]

The real problem is already here and despite Bukele playing macho on Twitter, in reality, Salvador is still discussing with the IMF a 1.3 billion loan, that on top of the 400 million bonds they've issued in December to cover the current deficit.

Woah. Then it won't be easy...
IMF is hard to convince out of their conditions - possible, but hard. I am curious what can he sacrifice to keep them happy.
I really hope that my worse expectations there won't happen.

Tell me about,  IMF is the total opposite of what they represent, Bukele should have known better than striking a deal with that stringent organization, they do more harm than good to the economy of a small country like El-Salvador,
Surely he will have to sacrifice something damaging the already fragile economy because in the end those conditions must be met. He made a wrong move.

[Bitstar_coin]

My question is will every other country that attempt to adopt btc as part of legal tender face such request from the IMF or this request is as a result of an ongoing commitment of El-Salvador with the IMF group?
Because if this is the case, I think this can pose a problem to countries who have similar intention in the future and can also be a big barrier to the mass adoption that the btc community so desired, I just want to understand the situation much better.

[NeuroticFish]

IMF is the total opposite of what they represent, Bukele should have known better than striking a deal with that stringent organization, they do more harm than good to the economy of a small country like El-Salvador,
Surely he will have to sacrifice something damaging the already fragile economy because in the end those conditions must be met. He made a wrong move.

I'm not sure what you're expecting from IMF, but I've read some years ago an interesting view: IMF are basically some accountants handling a huge pile of money for lending.

So they care most about the numbers.
And whether we like or not Bitcoin, an accountant will see those coins only as money spent.

If Bukele can convince them he can get the numbers right, if he can convince them that this and that investment will produce money, if he can reduce other costs here and there, he has a chance. A small one, but it's there.

Wrong move? Yes and no. If, as an extreme (and impossible) example, he gets the loan, invests it all into bitcoin, and we get then to new ATH. He can sell and be on a healthy profit.
USD has its own inflation, pretty big actually, and because of that the actual value he has to pay back may be even smaller after some years (especially as the interest is usually rather small).

The problem with IMF loans is the cost in tasks/checkpoints to be achieved and the signals sent to the fiat finances if such a deal is not made (resulting in higher costs for other loans they want to get, resulting in lower rating hence less investments coming from rich countries). And this gives IMF an unnecessarily big power.

My question is will every other country that attempt to adopt btc as part of legal tender face such request from the IMF or this request is as a result of an ongoing commitment of El-Salvador with the IMF group?
Because if this is the case, I think this can pose a problem to countries who have similar intention in the future and can also be a big barrier to the mass adoption that the btc community so desired, I just want to understand the situation much better.

Let's see if IMF will succeed in this. Let's see if other countries will adopt Bitcoin as legal tender. Let's see if those will also have the economy in deep shit and need help from IMF or not.
But as a good rule.. we don't have the crystal ball, hence let's wait and see.

[stompix]

Woah. Then it won't be easy...
IMF is hard to convince out of their conditions - possible, but hard. I am curious what can he sacrifice to keep them happy.
I really hope that my worse expectations there won't happen.

Probably not much.
If it were for the IMF to actually stand by the requirements nobody would get a loan, poeple who arrive at the mercy of the IMF are the ones who can't get a loan normally and their debt is usually trash, and this is where it gets polical.
There are counties who own debt, who own business, and who would put pressure on the IMF board to give them money not to see them defaulting, at least the losses are distributed among everyone, then there are the allies who can't afford to help them financially but can put a bit of pressure in the decisions and in the end, everyone gets the money and everyone knows that it shouldn't have happened.

As for Bukele, he will never give up Bitcoin, he can't. Once he doesn't have Bitcoin to brag about, he's a nobody, an Alejandro Giammattei or Orlando Hernández, and I bet not even 0.1% of the users here know who there are guys are, I didn't either so I had to look on the wiki for the presidents of Salvador neighbor countries. If Bukele gives up BTC he loses everything, he will have nothing left to be in the spotlights he loves so much.

My question is will every other country that attempt to adopt btc as part of legal tender face such request from the IMF or this request is as a result of an ongoing commitment of El-Salvador with the IMF group?
Because if this is the case, I think this can pose a problem to countries who have similar intention in the future and can also be a big barrier to the mass adoption that the btc community so desired, I just want to understand the situation much better.

It's pretty simple, the IMF can't impose on you anything unless you want money from them, if you're that desperate and you can't find another source for a loan on international markets then there are a lot of things you should fix first.

[Dunamisx]

#BREAKING IMF urges El Salvador to remove Bitcoin as legal tender

Source --> https://twitter.com/AFP/status/1486051087736094729?s=20

I don't want to be pessimistic but still El Salvador wasn't ready to adopt Bitcoin, now with the price dropping and the pressure mounting, do you think El Salvador is ready to continue to adopt Bitcoin as legal tender?

Let's see how the price will also react to more negative news.

I think the decision has already been made after careful consideration and evaluation have been taken before El-Savador finally decided on adopting Bitcoin as a legal tender, firstly it would have been a pity if the adopted currency wasn't Bitcoin but altcoin and knowing fully that Bitcoin is the first and leading coin of all digital currency.

We can also look from the angle of what if Bitcoin rises above $69k breaking the all time high record, what i sense here is that the type of El-Savador's economy running system Will also be volatile (unstable) and of which I know its part of their considerations before the adoption since individual has it full independency on what rate, how and when to sell or buy their Bitcoin. The fate of El-Savador's for deciding to adopt bitcoin in later future will go along with the tremendous success of Bitcoin in years to come.

[mia_houston]

as we know that the IMF is one of the most influential banks in the world if indeed the opposition made by the IMF against the abolition of bitcoin then this will be a disaster for the survival of bitcoin in the future as we know if the IMF affects the supreme leader of El Salvador then everything bad will happen to bitcoin especially considering that El Salvador became the first country to legalize bitcoin circulation in the country, we really hope that the supreme leader of elsavador will uphold his stance to continue to provide space for bitcoin to continue circulating in the country

I don't know what the purpose of the IMF is to remove bitcoin from el Salvador, but I think they have a goal for el salvador to continue to depend on the usd currency and also to the IMF, I think after el salvador commits to continue the legal tender status of bitcoin it looks like the IMF seems very fear if salvador can be successful with what they have been doing, and actually that made the IMF even more heated when Bukele planned to issue $1 billion Bitcoin-backed bonds.
As a world bank the IMF should have understood the alternatives that salvador took to improve their financial condition , currently the IMF only plays a role as a world bank that provides loans to Salvador and if later the adoption of bitcoin by Salvador is successful and is able to pay off their loans to the IMF, isn't that not a problem at all?

[virasog]

They are a huge organization that relies on dollars and so that's the reason why they're putting their trust in it instead of letting El Salvador do its thing alone, they want to intervene as it seems doesn't look for them. What's the matter if a country wants to adopt it as a legal tender and they actually have passed it and went through a process and made a bill for it. I think this is one of the reasons why many countries don't like to stand with these international orgs because they are trying to interfere with anything with almost everything.

the IMF have nothing to do with "trusting the dollar". their game is to set terms and conditions on countries that take loan dollars that allow the IMF to try punishing a country.

IMF gives loans to underdeveloped countries with tough terms and conditions. Since the underdeveloped countries need finances to stand themselves, they take the loans with high interested rates. Once the country takes a loan, it will become the slave of IMF because now IMF can impose any rules and regulations in the country.

El Salvador should not be threatened by these IMF orders and try to establish itself. For sure, with bitcoin, they will become independent of IMF. Also, the current bitcoin dump is temporary and soon bitcoin will be available at higher rates.