{"id":20280,"date":"2023-02-12T02:20:58","date_gmt":"2023-02-12T10:20:58","guid":{"rendered":"https:\/\/coinnetworknews.com\/risks-averted-but-transparency-needed-bitcoin-news\/"},"modified":"2023-02-12T02:20:58","modified_gmt":"2023-02-12T10:20:58","slug":"risks-averted-but-transparency-needed-bitcoin-news","status":"publish","type":"post","link":"https:\/\/coinnetworknews.com\/risks-averted-but-transparency-needed-bitcoin-news\/","title":{"rendered":"Risks Averted, but Transparency Needed \u2013 Bitcoin News"},"content":{"rendered":"
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According to a recent mission statement published by the International Monetary Fund (IMF), El Salvador has adopted bitcoin as legal tender and has avoided risks so far. The IMF states that the risks have not materialized due to the limited use of bitcoin. However, the United Nations financial agency warns that if its legal tender status drives growth, it could pose risks to the country\u2019s \u201cfinancial integrity and stability.\u201d<\/strong><\/p>\n

IMF Discusses El Salvador\u2019s Bitcoin Legal Tender Status: Limited Use Averts Risks, but Growth Could Fuel Concerns<\/h2>\n

On Feb. 10, 2023, the International Monetary Fund (IMF) released a concluding mission statement<\/a> regarding El Salvador and its economy. The IMF visited San Salvador from Jan. 30 to Feb. 8 for the 2023 Article IV consultation. In the statement, the IMF discusses bitcoin adoption in El Salvador and states that \u201crisks should be addressed.\u201d Currently, the IMF acknowledges that the risks it raised in 2021<\/a> have mostly been avoided.<\/p>\n

\u201cWhile risks have not materialized due to the limited bitcoin use so far\u2014as suggested by survey and remittances data\u2014its use could grow given its legal tender status and new legislative reforms to encourage the use of crypto assets, including tokenized bonds (Digital Assets Law),\u201d the IMF\u2019s researchers detail. \u201cIn this context, underlying risks to financial integrity and stability, fiscal sustainability, and consumer protection persist, and the recommendations of the 2021 Article IV remain valid.\u201d<\/p>\n

El Salvador declared<\/a> bitcoin as legal tender in September 2021, and since then, growth has been sluggish<\/a>. The country has made regular bitcoin investments and added it to its treasury. However, the IMF emphasizes the need for more transparency in the government\u2019s bitcoin purchases and the Chivo wallet<\/a>, which is state-owned. \u201cGreater transparency regarding the government\u2019s bitcoin transactions and the financial status of the state-owned bitcoin wallet (Chivo) is crucial, particularly to evaluate underlying fiscal contingencies and counterparty risks,\u201d the agency noted.<\/p>\n

Besides the risks associated with bitcoin, the slow pace of its adoption, and adverse economic shocks, the Salvadoran economy grew rapidly last year, according to the IMF. The IMF estimates that the economy expanded by 2.8% in 2022. Amid mounting economic vulnerabilities in 2022, the IMF asserts that the Salvadoran Treasury still lacks access to international capital markets.<\/p>\n

The IMF identifies two major issues that the Salvadoran government could address: implementing better Anti-Money Laundering\/Combating the Financing of Terrorism (AML\/CFT) policies and increasing fiscal transparency.<\/p>\n

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\nTags in this story
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2.8% growth<\/a>, Article IV consultation<\/a>, Bitcoin<\/a>, consumer protection<\/a>, counterparty risks<\/a>, crypto assets<\/a>, economic vulnerabilities<\/a>, El Salvador<\/a>, financial integrity<\/a>, financial situation<\/a>, fiscal contingencies<\/a>, fiscal sustainability<\/a>, fiscal transparency<\/a>, government transactions<\/a>, growth<\/a>, IMF<\/a>, International Monetary Fund<\/a>, Investments<\/a>, legal tender<\/a>, legislative reforms<\/a>, limited use<\/a>, mission statement<\/a>, Nayib Bukele<\/a>, Recommendations<\/a>, risks<\/a>, Salvadoran economy<\/a>, Salvadoran President Nayib Bukele<\/a>, Stability<\/a>, state-owned wallet<\/a>, tokenized bonds<\/a>, Transparency<\/a>, Treasury<\/a><\/div>\n<\/div>\n

What are your thoughts about the IMF\u2019s recommendations for the country\u2019s financial stability and integrity? Let us know what you think about this subject in the comments section below.<\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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