The post IMF Praises Bitcoin in Talks with El Salvador: Are We on the Brink of the Biggest Bull Run in History? appeared on BitcoinEthereumNews.com.

The IMF is discussing with El Salvador to address the economic risks associated with Bitcoin’s adoption as a legal tender. Despite market volatility, El Salvador continues to buy Bitcoin and remains committed to its Bitcoin strategy under President Bukele. The International Monetary Fund (IMF), the global financial institution, is currently communicating with El Salvador to mitigate the possible macroeconomic and fiscal impacts of the adoption of Bitcoin as an official currency. This is to ensure the generation of a clear plan to help stabilize and develop El Salvador’s economy and handle the challenges brought by cryptocurrency.  On August 6, the IMF stated that negotiations with the Salvadoran authorities are ongoing. An IMF mission led by Raphael Espinoza also held both face-to-face and remote meetings to address key elements of the country’s economic stability. The major concerns are strengthening public finances, building up banks’ reserves, and increasing financial transparency.  Ongoing Negotiations Focus on Fiscal Stability and Transparency The IMF has proposed that El Salvador strive to enhance its primary balance by about 3.5% of GDP in the next three years. This target is focused on the proper management of public wages while guaranteeing that social services and infrastructure are not affected. The IMF pointed out that these fiscal measures are necessary to assure the stability of the economies, given the risks emanating from Bitcoin’s price instability.  The discussions also touched on the necessity of gradually building up the financial system’s reserves over time through a strategic plan. This plan is meant to guarantee that private sector credit and its growth are not jeopardized when the government attempts to decrease its domestic funding. Possible funding from the IMF and other MDBs is being explored to help.  The IMF and Salvadoran officials admitted that the Bitcoin project could involve fiscal and financial risks. Although these risks have…

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Filed under: News - @ August 10, 2024 7:20 pm