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

[franky1]

So El Salvador starts thinking about dumping US dollar in favor of bitcoin and an American institution in Washington D.C. starts pressuring them not to do it and you think it is has anything to do with them not being ready to adopt bitcoin?!! Quite the opposite, it is all about US not wanting to accept that their currency is losing the position it once had in the world.

el sal' wont just stop using the dollar. there wont be a "dump". but yes the $power players want the US dollar to have power, so they fear countries that can still use the dollar but not be a slave to the dollar.

its not about dumping the dollar. its about not being a slave to the loan conditions(power) of the dollar.

..
take any loan example.
banks love giving loans. especially to those that can only just about afford the repayments. it makes the receiver dependant on the loan not defaulting because they will lose their house. job etc.
those that can afford to pay off a loan the next day but just use it as a temporary credit line. are not in fear of loan conditions. and banks hate that. they hate people that can pay off a mortgage early/easily, because then they cant charge them late fee's or increased interest

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[worle1bm]

The IMF will always come up with such statements and like the country will not get any help from them if they don't halt the btc usage but in reality they won't need them if the position is hold for some years and this is what they fears the most.The President will never step back and have strong plans to hold and invest more in btc.He is young and visionary and seek btc as best source for the country's growth.What progress they have made with the IMF funds? But with btc they can beyond imagination and their financial freedom from USD.

[KingsDen]

IMF does not have the powers to reverse El Salvador's decisions of bitcoin legal tender. IMF can only advice or encourage them to do so.
This becomes a problem because El Salvador as a country is not financially stable. They will always run to IMF and other monetary organisations for help. Then these bodies cannot help her if they are unsure the money would be well utilised and returned in such a case.
As an individual, I may not be able to lend you monies if I don't know how to get it back.
Bitcoin is highly volatile. It is quite unfortunate El Salvador adopted Bitcoin when it was on ATH. But, Bitcoin never fails.

[worldtraveller321]

in some aspects maybe it was good thought to make BTC legal tender, i think it is too soon though in the game to use BTC in that way. Still something new. still lots of opposition out there. Also BTC does have it's flaws as well. I am thinking the right crypto that could be used a as mainstream money for using to get goods and services has yet to be created. BTC by itself may not really be the main answer, just yet.

I am thinking the situation, it does take some time to see any positive results when someone tries to make a change to something completely different.  Using BTC as legal tender  could take over 5 years in use till the positives could actually be seen or noticed. It has only been less then 6 months. too early in the game still. However I am thinking the idea will falter and not be in favour. El Salvador maybe see a economic collapse and the president will get blamed for it. Which in turn will create more opposition for BTC in the world by many.

they moved forward way too soon in my thoughts, then again maybe I could be wrong, but the final answer is not there yet.

[Artemis3]

Only noobs would think El Salvador is in trouble. The same kind that sells in panic when the price goes down.

It seems to my eyes, that Bukele is not one of those noobs. There is no loss unless you sell, and for a country's reserves, you rarely sell.

So no matter what some foolish bankers say, El Salvador is free of them, and that is their greatest worry. Their jobs are on the line now.

When El Salvador emerges as the wealthiest country in the region, who are those bankers from IMF going to convince next? A domino effect of world wide rebellion will occur, that is what they fear the most. The power struggle of those who can manipulate money, vs those who can't.

Banks with their fractional reserve practices, central banks invented solely for this perverse mechanism, and the International Monetary Fund and World Bank who is composed from people from said central banks.

The whole current economic model is fading to finally enter the principles of the Austrian school of economy, finally after a century of bubbles and crashes that could have been avoided, perhaps the world will face a few more before finally giving up (or the old people passing away).

For example the final collapse of the USD could prompt people, to finally stop giving doubts to Bitcoin. I'm afraid for the vast majority it is too late, they believe their politicians would never fail them, but fail they do.

America has now the worst inflation in half a century, and they have seen nothing. Keep printing for "social aids" and you repeat the same mistake others did in history. Having a better economy gives you some more leverage, but nothing is infinite.

A politician always wants to be a protagonist, they feel they are actually "saviors" or something. Why do you think the Austrian economists were ignored for more than a century? Because the politicians hated being told: get out of the way and leave the economy alone.

When you know the correct thing for Biden is to drop the money emission, how can they accept it? And this is how you end with a situation like that of Venezuela, Zimbabwe, or Yugoslavia. The fact that politicians have the power to ruin everyone's wealth "in the name of helping those with need" (why not take from the military spending then huh?).

Inflation is the worst of taxes, and you must know its especially perverse when its the politicians with the bankers doing it in collusion.
Bitcoin destroys this, forever, and they hate it. That is why they have a worldwide FUD campaign, nearly ALL central banks are doing the same.

Their biggest fear now? Where is the next country to declare Bitcoin legal tender. And the domino effect this will trigger, especially if the next crisis makes them islands of wealth.

[electronicash]

punishing El Salvador for wanting to have economic sanctions seems too much but it's what big economic bodies do like big banks. they don't want you paying the debts you have. not sure if they are sanctioned already from the SWIFT network but they may be if El Salvador doesn't comply with this IMF demand. this compromises El Salvador's economic freedom. Nayib though is not worried about it. in his reply was a meme on tweeter pushing IMF away.

[kryptqnick]

I believe IMF was against El Salvador adopting Bitcoin before and refused to help El Salvador with that. So nothing really surprising is happening here, and I don't think it'll change El Salvador government's policy because they knew the IMF was against it and adopted it anyway. I also think that IMF would be better off working on accepting Bitcoin into their system, treating it as another form of money they can work with. In the meantime, El Salvador has chosen its path, and it seems that they've been withdrawing from their reliance on loans from them for years and are currently not dependent on them. So IMF doesn't have much leverage here.

[Taskford]

I believe IMF was against El Salvador adopting Bitcoin before and refused to help El Salvador with that. So nothing really surprising is happening here, and I don't think it'll change El Salvador government's policy because they knew the IMF was against it and adopted it anyway. I also think that IMF would be better off working on accepting Bitcoin into their system, treating it as another form of money they can work with. In the meantime, El Salvador has chosen its path, and it seems that they've been withdrawing from their reliance on loans from them for years and are currently not dependent on them. So IMF doesn't have much leverage here.

It can change their stand if IMF push to ban their country on their list since we know how useful the IMF in terms of financing since it has a huge plays a huge part if El Salvador want to lend some money to use on developing their country. This is totally bad if this happen so hoping that they will not turn things down and their government decide to revoke their adoption on bitcoin.

[stadus]

I believe IMF was against El Salvador adopting Bitcoin before and refused to help El Salvador with that. So nothing really surprising is happening here, and I don't think it'll change El Salvador government's policy because they knew the IMF was against it and adopted it anyway. I also think that IMF would be better off working on accepting Bitcoin into their system, treating it as another form of money they can work with. In the meantime, El Salvador has chosen its path, and it seems that they've been withdrawing from their reliance on loans from them for years and are currently not dependent on them. So IMF doesn't have much leverage here.

It can change their stand if IMF push to ban their country on their list since we know how useful the IMF in terms of financing since it has a huge plays a huge part if El Salvador want to lend some money to use on developing their country. This is totally bad if this happen so hoping that they will not turn things down and their government decide to revoke their adoption on bitcoin.

In a statement following a meeting Tuesday, the IMF cited "large risks associated with the use of Bitcoin on financial stability, financial integrity, and consumer protection, as well as the associated fiscal contingent liabilities." https://www.dw.com/en/imf-urges-el-salvador-to-drop-bitcoin-as-legal-tender/a-60559687

This is just an advice for El Salvador from IMF to drop bitcoin as a legal tender because it's really disappointing to see that the country right now is facing a huge debt because they decided to buy bitcoin when it was in its high peak. Although it is said that El Salvador is also buying more bitcoin in its dip, but the fact is that El Salvador is still not making a huge progress that they can't rely for loans from IMF in the future.

[BIT-BENDER]

I think El Salvador didn't adopt Bitcoin because of the price, if that was the case it won't be am adoption in would be an invest not an adoption, so I think if El Salvador has done their home work well before adopting Bitcoin then they should know that Bitcoin is volatile and this price swing is Normal, and also except they are breaking any rule I don't think IMF has any thing against El Salvador and they can't force El Salvador to go against their earlier adoption of Bitcoin.

[nullama]

The IMF is basically proof of stake, where the big players get richer, and the small players get poorer.

How does it work?, first the IMF generates a certain amount of SDR out of thin air:

IMF Governors Approve a Historic US$650 Billion SDR Allocation of Special Drawing Rights

Then, they distribute those SDR to their members. This is how it's distributed:

the allocation is distributed to member countries in proportion to their quota shares at the Fund.

The quotas for each member are available here: https://www.imf.org/en/About/executive-board/members-quotas

Here are some examples:

• United States: 17.43%
• Japan: 6.47%
• China: 6.40%
• Germany: 5.59%
• United Kingdom: 4.23%
• El Salvador: 0.06%

Moreover, interest is paid to countries that hold SDR, and interest is charged to countries receiving a loan.

Here's a list of countries with loans from the IMF: https://www.imf.org/external/np/fin/tad/balmov2.aspx?type=TOTAL

Here's an interesting view from the 2015 congressional report titled: Bitcoin: Questions, Answers, and Analysis of Legal Issues

Concern About International Monetary Fund Authority
One issue that has received some attention is the ability of the International Monetary Fund (IMF) to defend a traditional currency of one of its member countries from a speculative attack involving a digital currency such as Bitcoin because the IMF’s Articles of Agreement do not explicitly permit it to acquire a currency not issued by one of its members. At least one commentary examines possible options for amending or reinterpreting the IMF’s authority.

Basically the IMF is not able to acquire Bitcoin. That's probably one of the reasons why it doesn't want El Salvador to keep it as legal tender.

[Abiky]

#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 don't think El Salvador will be intimidated by the IMF in any way. The country's president really knows what he's doing by putting his faith in a decentralized cryptocurrency. Backing off now, would be giving up to the bankers. Pressure will continue to mount over time, as banks don't want to lose dominance in the mainstream economy. As Bitcoin's price continues to increase, El Salvador will be one step closer from transforming itself into a developed country. I'd love to see how other countries will react after they see El Salvador becoming successful in the future. The more countries join the Bitcoin revolution, the faster banks (and the IMF) will lose traction. Who knows if this will lead us to hyperbitcoinization in the long term? Just my opinion

[yazher]

If they can find some way to resolve this problem then you can say that they really are not joking about their implementation of bitcoins in their country. I think they already have some plans to counter this problem and they will try as hard as they can to resolve and further strengthen their vision towards the future with Bitcoin. They're just facing a common problem as an investor but the only problem is they are a whole country and all eyes are on them watching closely if they can survive or totally collapse with their dreams.

[CaVO32]

If they can find some way to resolve this problem then you can say that they really are not joking about their implementation of bitcoins in their country. I think they already have some plans to counter this problem and they will try as hard as they can to resolve and further strengthen their vision towards the future with Bitcoin. They're just facing a common problem as an investor but the only problem is they are a whole country and all eyes are on them watching closely if they can survive or totally collapse with their dreams.

This is what I believe challenging Bukele's leadership. Since people around the world know that they are the first country to accept bitcoin as legal tender, all eyes are on them. So some of them are just waiting for their failure. And in this case, I don't think Bukele will give up that easily even if it is IMF calling for reversal of their action. It will be more of a challenge for them and will continue to show that they haven't made a mistake when they announced bitcoin as legal tender. They will find ways on how to exhaust all their means to support and make crypto market stronger in their jurisdiction. So I don't think they will just follow the advise of IMF or any other organization.

[cabron]

If they can find some way to resolve this problem then you can say that they really are not joking about their implementation of bitcoins in their country. I think they already have some plans to counter this problem and they will try as hard as they can to resolve and further strengthen their vision towards the future with Bitcoin. They're just facing a common problem as an investor but the only problem is they are a whole country and all eyes are on them watching closely if they can survive or totally collapse with their dreams.

This is what I believe challenging Bukele's leadership. Since people around the world know that they are the first country to accept bitcoin as legal tender, all eyes are on them. So some of them are just waiting for their failure. And in this case, I don't think Bukele will give up that easily even if it is IMF calling for reversal of their action. It will be more of a challenge for them and will continue to show that they haven't made a mistake when they announced bitcoin as legal tender. They will find ways on how to exhaust all their means to support and make crypto market stronger in their jurisdiction. So I don't think they will just follow the advise of IMF or any other organization.

It may take a while before things could escalate between IMF vs El Salvador. It's always what happens when they encounter a country that is not obedient. So the question is that is El Salvador capable of protecting thier president whenever there is a coup to dethrone him or simply assassination?  That's not even the worst that could happen.

El Salvador is really creating something that will make other countries follow like that Volcano bonds. If IMF is determined, IMF would also have to stop this project.

[Kakmakr]

The International Monetary Fund (IMF) does not want El Salvador to use Bitcoin as legal tender, because they want them to stay with the US Dollar, so that they can loan more money to them and thus control whatever they do in their country. (Their power come from the control they have with the loan sword they have over these countries)

They threatened El Salvador just after they made the announcement that they would adopt Bitcoin as legal tender, that they will not loan more money to them, if they do that. 

[Kakmakr]

The International Monetary Fund (IMF) does not want El Salvador to use Bitcoin as legal tender, because they want them to stay with the US Dollar, so that they can loan more money to them and thus control whatever they do in their country. (Their power come from the control they have with the loan sword they hold over these countries heads)

They threatened El Salvador just after they made the announcement that they would adopt Bitcoin as legal tender, that they will not loan more money to them, if they do that. 

[pooya87]

So El Salvador starts thinking about dumping US dollar in favor of bitcoin and an American institution in Washington D.C. starts pressuring them not to do it and you think it is has anything to do with them not being ready to adopt bitcoin?!! Quite the opposite, it is all about US not wanting to accept that their currency is losing the position it once had in the world.

el sal' wont just stop using the dollar. there wont be a "dump". but yes the $power players want the US dollar to have power, so they fear countries that can still use the dollar but not be a slave to the dollar.

its not about dumping the dollar. its about not being a slave to the loan conditions(power) of the dollar.

You are right and I wasn't suggesting a total dump, at least not in near future specially from such a poor country. But even a small dump, like if people used 10 bucks less in US dollar and used an alternative for it, causes mass panic among US policy makers. Because they know where the world is headed and how US dollar is going to become obsolete in the future, so they try their best to postpone it as much as they can.
This is also why some 3 letter agencies became super active in El Salvador right after bitcoin adoption and they even orchestrated a lot of attacks on their infrastructure including the ATMs.

[Ziskinberg]

What can the IMF do if El Salvador will still continues to use bitcoin as a legal tender?

They made their decision, they already adopted bitcoin and they cannot just easily change it because of what IMF says.
It's their personal decision and before they consider bitcoin as a legal tender, they already had a series of studies to know how it will benefit their economy and their country overall. Besides, it's not only bitcoin that is considered as legal tender in their country, they always have an option.

[freedomgo]

What can the IMF do if El Salvador will still continues to use bitcoin as a legal tender?

They made their decision, they already adopted bitcoin and they cannot just easily change it because of what IMF says.
It's their personal decision and before they consider bitcoin as a legal tender, they already had a series of studies to know how it will benefit their economy and their country overall. Besides, it's not only bitcoin that is considered as legal tender in their country, they always have an option.

Honestly, IMF has nothing to do with the decision of El Salvador, but it may affect the relationship status between them. IMF is seeing the threats brought by bitcoin and according to them, bitcoin adoption entails large risks for financial and market integrity, financial stability, and consumer protection. It also can create contingent liabilities. Read it here: https://www.imf.org/en/News/Articles/2022/01/25/pr2213-el-salvador-imf-executive-board-concludes-2021-article-iv-consultation

Nayib Bukele is very firm in his own decision not to abide with IMF, but i don't think El Salvador citizens agree with it since there were 80% of them were totally against from adopting bitcoin.