The International Monetary Fund (IMF) is once again urging El Salvador to overhaul its Bitcoin policies, emphasizing a need for stronger regulations. During an Oct. 3 press conference, Julie Kozack, the IMF’s communications director, reiterated the organization's concerns. Although she avoided specific details, Kozack stated that the IMF is calling for a reduced focus on Bitcoin, tighter oversight of its ecosystem, and a limitation of public sector exposure to the cryptocurrency.

Since El Salvador made Bitcoin legal tender in 2021, the IMF has been vocal in its opposition, pushing the nation to revert to traditional financial systems. Despite these efforts, many of the risks the IMF predicted regarding Bitcoin have not yet materialized, as acknowledged in their August 2024 statement.

The IMF’s stance against Bitcoin is well-known. As the global financial landscape faces increasing instability, some individuals and nations have begun moving away from fiat currencies and toward Bitcoin’s decentralized framework. Despite this, the IMF continues to promote central bank digital currencies (CBDCs) as an alternative.

In September 2024, the IMF introduced the “REDI” framework to encourage global CBDC adoption. This framework focuses on regulation, education, design, and incentives, aiming to make CBDCs more attractive to central banks and their citizens.

At the same time, the IMF has suggested taxing crypto mining energy use to curb environmental impacts. This could lead to a significant cost increase for miners, potentially crippling the industry in the wake of rising mining difficulty and post-halving challenges.

While Bitcoin’s future in El Salvador remains uncertain, the IMF's pressure is far from easing.

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