IMF urges El Salvador to remove Bitcoin as legal tender

[Silberman]

This isn't really IMF that is speaking all this, it's actually the big countries like US/UK which are saying this through IMF, you can be a 15 year old and understand that there is no way that a deflationary currency can bring in Inflation unless obviously, you are talking about devaluation of fiat currency due to decreased demand and not exactly inflation. But I am very sure that EL Salvador won't come back from it's decision, it's a very small as well as independent country, it has never aimed of becoming a very big superpower for them, their limited economy works well, so they can very well operate without any such assistance from the IMF.

If anything this is yet one more reason to adopt bitcoin, the IMF one of the most powerful institutions around the world is failing to convince a small country to follow their policies despite the difference in power and the threats they have issued at El Salvador, if this is not a show of the power of bitcoin and how centralized institutions have a lot of problems to deal with it then I do not have any idea of what this could be.

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[The Cryptovator]

Nothing except centralized organization doesn't like a decentralized cryptocurrency. IMF is a centralized organization and it always will force to go through centralization. Those who are involved with Bitcoin they are well aware of it. So IMF doesn't need to force them. They should prevent El Salvador before accept as a legal tender. Now reversing the decision would be harmful to the citizens. They don't know the potentiality of Bitcoin so they will be always against it. Not surprising.

[arallmuus]

Now reversing the decision would be harmful to the citizens. They don't know the potentiality of Bitcoin so they will be always against it. Not surprising.

Its going to affect Nayib's reputation if somehow the decision is revoked but imagine the domino effect that it would create for the whole crypto community. There will be a major sell off if the decision is announced and it would put the pressure on the market downward.

IMF is a centralized organization and it always will force to go through centralization

Well actually IMF is right in some sense but  if bitcoin goes down to anything below $20k, that is going to hurt El Salvador financially. Its kind of a gamble that Nayib had to take in order to secure his country financially but depending on how the market goes, it could be a bad decision that is going to be recorded in history.

[Zilon]

Which ever way IMF are trying to secure both their interest and that of El Salvador. I just feel IMF are scared of losing out funds to crypto if the eventually lend El Salvador some loans in the future. Bitcoin as a legal tender will cause a strong deflation in price if Bitcoin falls further and would cause massive inflation if it takes the bull run. Crypto is too risky to rely ones economy on. If it must remain a legal tender then it shouldn't also serve as resource for national funds

[Sithara007]

El Salvador should say STFU to IMF. The IMF pointed out mainly two things - volatility and usage in criminal activity. These guys don't have an issue when the value of fiat currencies go down like a falling knife. They don't have an issue when fiat currency is being used for the majority of criminal activity around the world. The real issue is not with volatility or anything else, but with the insecurity being felt by fiat lapdogs like the IMF. The president (Nayib Bukele) and the treasury minister (Alejandro Zelaya) have reacted defiantly to the demands, and rightly so.

[uneng]

IMF wants to show the world what happens to countries which adopt bitcoin as legal tender. They are letting the message very clear: don't ever think about adopting bitcoin, because if you do this, you aren't going to have financial support from us anymore...

Blackmail on its purest form.

In fact what happens is that once governments embrace bitcoin for their own countries, they have to resign loans, international investments or any other kind of partnership with the establishment. It's a difficult decision to make, and I'm not sure if El Salvador is able to go ahead with bitcoin, because they totally depend on international help from IMF to pay the rising debt that might reach to 100% of their GDP soon if something isn't done to control it.

[carlfebz2]

El Salvador should say STFU to IMF. The IMF pointed out mainly two things - volatility and usage in criminal activity. These guys don't have an issue when the value of fiat currencies go down like a falling knife. They don't have an issue when fiat currency is being used for the majority of criminal activity around the world. The real issue is not with volatility or anything else, but with the insecurity being felt by fiat lapdogs like the IMF. The president (Nayib Bukele) and the treasury minister (Alejandro Zelaya) have reacted defiantly to the demands, and rightly so.

There would be always that kind of criticism but it would be done indirectly on which you couldnt tell if they are really that serious or in concern or just trying out to tell them that they had done such mistake.

You wouldnt really be that surprised that they would giving out criticisms on something which is out of their interest and would just neglect on what fiat is been doing or simply on that traditional stuffs happening.

As for the President of El Salvador on which they are aware on what they are doing and whats done is done but doesnt mean that they would just simply fold off with these simply and common volatility issues
of bitcoin.

[Japinat]

IMF wants to show the world what happens to countries which adopt bitcoin as legal tender. They are letting the message very clear: don't ever think about adopting bitcoin, because if you do this, you aren't going to have financial support from us anymore...

Blackmail on its purest form.

In fact what happens is that once governments embrace bitcoin for their own countries, they have to resign loans, international investments or any other kind of partnership with the establishment. It's a difficult decision to make, and I'm not sure if El Salvador is able to go ahead with bitcoin, because they totally depend on international help from IMF to pay the rising debt that might reach to 100% of their GDP soon if something isn't done to control it.

As if IMF know exactly that bitcoin won't help El Salvador in the long run. This is also a clear message that IMF favors only the US official currency, that if countries make other currency as a legal tender, it will be a threat to their official currency. But honestly, if El Salvador will succeed all these trials and the blackmail made by IMF, this will urge other countries to adopt bitcoin too so they can stay away from the shadow of IMF. If El Salvador can do it, there' no reasons that other countries can't do it.

[Zlantann]

The IMF is a business organization that gives loans. Their loans are not interest free, hence the want to make profit. No business organization would want to loose customers. The IMF would always want El Salvador to come back and get more loans. Therefore they will try to manipulate El Salvador to ensure they don't get money from businesses to be free from debts.

[yhiaali3]

This is complete nonsense!!! They accuse Bitcoin that it will cause inflation when the truth is the exact opposite. Fiat is the one who causes inflation and printing more banknotes leads to money becoming worthless in the end. The governments of capitalist countries control the International Monetary Fund and I expect that they do not want success in El Salvador’s experiment in adopting Bitcoin Because this could lead to the spread of this experiment in other countries, if successful, and this is exactly what they do not want.

[lumbanrang]

First of all, how could a deflationary coin like Bitcoin cause inflation? as far as I know, the main factor in inflation is an increase in the prices of goods and services (https://www.investopedia.com/ask/answers/111314/what-causes-inflation-and-does-anyone-gain-it.asp) . And also El Salvador not only use Bitcoin as their currency, they also use USD to support their economy. So the IMF's reasoning doesn't make sense. Moreover, El Salvador is sovereign over the regulations in their country, and the IMF as a global financial organization should respect any decision made by the president of El Salvador.

[dezoel]

Everyone here is talking about the situation like they have no idea about the real deal. I have read it on reddit that IMF is not telling El Salvador to stop bitcoin legal tender out of blue, they are doing it because they asked a loan from them. El Salvador asked 1.3 billion dollars worth of loan from IMF, and IMF RESPONDED with this, they didn't just say it out of nowhere like it was their business. And when you ask someone to give you a loan, they may have some requirements about it as well.

I totally understand IMF not wanting crypto in El Salvador, it really makes sense, why? Because, we are talking about a "bank" that gives money to nations and this nation is buying bitcoin like crazy instead of using that money for whatever they needed loan for.

If a friend of yours had 3k dollars in bitcoin but asked you 13k dollars in loan, would you give it to them? Or would you say "I would give you 10k, and you could sell the 3k you have in bitcoin"?

[paxmao]

Nothing except centralized organization doesn't like a decentralized cryptocurrency. IMF is a centralized organization and it always will force to go through centralization. Those who are involved with Bitcoin they are well aware of it. So IMF doesn't need to force them. They should prevent El Salvador before accept as a legal tender. Now reversing the decision would be harmful to the citizens. They don't know the potentiality of Bitcoin so they will be always against it. Not surprising.

That seems to be the essence. The problem with all this is that the IMF always works in the same way: I will lend you money but you will have to follow and be abided by my economic agenda or else I will leave you to your own demise. El Salvador has a number of problems and, as far as I know, the US pays "aids" to fight against narco-traffic in what could be construed as a blackmail payment. Does it happen in bitcoin?

Everyone here is talking about the situation like they have no idea about the real deal. I have read it on reddit that IMF is not telling El Salvador to stop bitcoin legal tender out of blue, they are doing it because they asked a loan from them. El Salvador asked 1.3 billion dollars worth of loan from IMF, and IMF RESPONDED with this, they didn't just say it out of nowhere like it was their business. And when you ask someone to give you a loan, they may have some requirements about it as well.

I totally understand IMF not wanting crypto in El Salvador, it really makes sense, why? Because, we are talking about a "bank" that gives money to nations and this nation is buying bitcoin like crazy instead of using that money for whatever they needed loan for.

If a friend of yours had 3k dollars in bitcoin but asked you 13k dollars in loan, would you give it to them? Or would you say "I would give you 10k, and you could sell the 3k you have in bitcoin"?

According to that, the IMF could only lend to countries that have zero foreign currency reserves??

[Finestream]

Everyone here is talking about the situation like they have no idea about the real deal. I have read it on reddit that IMF is not telling El Salvador to stop bitcoin legal tender out of blue, they are doing it because they asked a loan from them. El Salvador asked 1.3 billion dollars worth of loan from IMF, and IMF RESPONDED with this, they didn't just say it out of nowhere like it was their business. And when you ask someone to give you a loan, they may have some requirements about it as well.

I totally understand IMF not wanting crypto in El Salvador, it really makes sense, why? Because, we are talking about a "bank" that gives money to nations and this nation is buying bitcoin like crazy instead of using that money for whatever they needed loan for.

If a friend of yours had 3k dollars in bitcoin but asked you 13k dollars in loan, would you give it to them? Or would you say "I would give you 10k, and you could sell the 3k you have in bitcoin"?

IMF is only urging El Salvador to discontinue adopting bitcoin. IMF directors “stressed that there are large risks associated with the use of bitcoin on financial stability, financial integrity, and consumer protection, as well as the associated fiscal contingent liabilities.” But if El Salvador will not follow them, of course the loan will be disapprove, but IMF can't do nothing whatever the decision of Bukele. And i can see that Bukele is still not triggered and yet, he added more bitcoins by buying them at a cheaper price. Source: https://www.cnbc.com/2022/01/25/drop-bitcoin-as-legal-tender-imf-urges-el-salvador.html

[takngantuk]

They don’t have the jurisdiction to do that to president Bukele and the country of El Salvador, because they were not educated enough about Bitcoin or doing some research about its positive takes. IMF is just simply illiterate and was just fed up with lots of misinformation about BTC and cryptocurrencies.

El Salvador has taken the right step towards innovation and adoption and they don’t want to be left behind. I even wished that Philippines would do the same after the election of our next president this coming May 2022.

if you see what happened to el salvador, i think the philippines will rethink their plans. el salvador is experiencing economic problems after legalizing bitcoin, and this will be a consideration for countries trying to legalize bitcoin/crypto. and I think what the IMF did was right. from the start they warned that country, and see what happens when bitcoin is downtrend.

[Silberman]

Which ever way IMF are trying to secure both their interest and that of El Salvador. I just feel IMF are scared of losing out funds to crypto if the eventually lend El Salvador some loans in the future. Bitcoin as a legal tender will cause a strong deflation in price if Bitcoin falls further and would cause massive inflation if it takes the bull run. Crypto is too risky to rely ones economy on. If it must remain a legal tender then it shouldn't also serve as resource for national funds

I could understand that, after all if they lend money to a country then they can put all kind of restrictions to the country about in what they can use their money or what they do expect out of them, so I am not surprised by that, this is why if El Salvador ever falls into problems and needs money from the IMF the first thing they will do is to ask for the derogation of the law that made bitcoin legal tender, this is why we need that El Salvador resists at least until there are more countries that do the same so bitcoin remains as a legal tender in other countries if that actually happens.

[oHnK]

Which ever way IMF are trying to secure both their interest and that of El Salvador. I just feel IMF are scared of losing out funds to crypto if the eventually lend El Salvador some loans in the future. Bitcoin as a legal tender will cause a strong deflation in price if Bitcoin falls further and would cause massive inflation if it takes the bull run. Crypto is too risky to rely ones economy on. If it must remain a legal tender then it shouldn't also serve as resource for national funds

I could understand that, after all if they lend money to a country then they can put all kind of restrictions to the country about in what they can use their money or what they do expect out of them, so I am not surprised by that, this is why if El Salvador ever falls into problems and needs money from the IMF the first thing they will do is to ask for the derogation of the law that made bitcoin legal tender, this is why we need that El Salvador resists at least until there are more countries that do the same so bitcoin remains as a legal tender in other countries if that actually happens.

For making BTC as a legal tender indeed much challanges fully, We can't really use it as a main legal tender and replace fiat. The big difference between fiat or crypto, is the regulator. You much prefer the government regulate u or the market? Both of them has their own weaknesses or the strenght.

[Kasabus]

First of all, how could a deflationary coin like Bitcoin cause inflation? as far as I know, the main factor in inflation is an increase in the prices of goods and services (https://www.investopedia.com/ask/answers/111314/what-causes-inflation-and-does-anyone-gain-it.asp) . And also El Salvador not only use Bitcoin as their currency, they also use USD to support their economy. So the IMF's reasoning doesn't make sense. Moreover, El Salvador is sovereign over the regulations in their country, and the IMF as a global financial organization should respect any decision made by the president of El Salvador.

I think the discussion has become too complex already. From my own understanding, if IMF cannot convince El Salvador to drop bitcoin as a legal tender, i think the best way is to regulate bitcoin in El Salvador. That way, IMF may stop urging El Salvador to narrow down the scope of bitcoin or drop it. Here are also some countries that have regulated, or planning to regulate the use of crypto. Read here: https://www.reuters.com/markets/currencies/imf-asks-el-salvador-drop-bitcoin-more-countries-clamp-down-2022-01-26/

[lumbanrang]

First of all, how could a deflationary coin like Bitcoin cause inflation? as far as I know, the main factor in inflation is an increase in the prices of goods and services (https://www.investopedia.com/ask/answers/111314/what-causes-inflation-and-does-anyone-gain-it.asp) . And also El Salvador not only use Bitcoin as their currency, they also use USD to support their economy. So the IMF's reasoning doesn't make sense. Moreover, El Salvador is sovereign over the regulations in their country, and the IMF as a global financial organization should respect any decision made by the president of El Salvador.

I think the discussion has become too complex already. From my own understanding, if IMF cannot convince El Salvador to drop bitcoin as a legal tender, i think the best way is to regulate bitcoin in El Salvador. That way, IMF may stop urging El Salvador to narrow down the scope of bitcoin or drop it. Here are also some countries that have regulated, or planning to regulate the use of crypto. Read here: https://www.reuters.com/markets/currencies/imf-asks-el-salvador-drop-bitcoin-more-countries-clamp-down-2022-01-26/

It is true that in some countries the circulation of cryptocurrencies is regulated. The government reasons that they want to protect their people from things like fraud, money laundering, etc. https://www.ndtv.com/business/5-reasons-why-cryptocurrency-regulation-is-important-2637741. But I think the regulation of cryptocurrency is quite funny because cryptocurrency itself is a digital asset that was launched to become a decentralized financial system that is free from government or third-party intervention.

[lalabotax]

For making BTC as a legal tender indeed much challanges fully, We can't really use it as a main legal tender and replace fiat. The big difference between fiat or crypto, is the regulator.

Sure. It must require big challenges because it is against the world governments and the centralized system. IMF as one of the centralized organizations must be unhappy if more countries adopt BTC as a legal tender. More countries use BTC as a legal tender, which means more countries are probably to be independent. IMF doesn't want this to happen because they cannot regulate world finance again in the future.