The International Monetary Fund (IMF) is pushing El Salvador for more transparency in its Bitcoin policy. The risks haven't hit the fan yet, but the IMF's not letting up. Bitcoin as official currency was supposed to save the country from poverty, and IMF is not happy with that not actually happening, at least yet.
In a statement Tuesday, the IMF said El Salvador needs to step up its game. They want the country to be more open about its crypto moves.
The IMF's been side-eyeing El Salvador's Bitcoin experiment since 2021. Back then, they warned about potential issues of letting BTC to be a legitimate currency on par with USD, which seemed revolutionary at the time and still seems now, as no other country has followed the same path yet.
But President Nayib Bukele - one of the most prominent Bitcoin maximalists - is not backing down.
He's been buying more Bitcoin like it's going out of style. El Salvador's now sitting on $327 million worth of the crypto, according to their public wallet. That might seem not too much comparing to some of the famous crypto whales. But El Salvador is a poor country. And that is an understatement, by the way. So buying so much BTC is a heavy burden for its economy.
The IMF's latest statement doesn't pull any punches. "On Bitcoin, while many of the risks have not yet materialized, there is joint recognition that further efforts are needed to enhance transparency and mitigate potential fiscal and financial stability risks from the Bitcoin project," it reads.
So, IMF is not openly saying buying BTC is a bad idea. It is saying that in a delicate, indirect way.
The government's been tight-lipped about the exact size of their investment. They've got a new government wallet, but it only holds a "big chunk" of their Bitcoin, according to Bukele.
But there is something else, that might hint to a looming danger.
El Salvador's Bitcoin Law requires businesses to accept the crypto. But in reality, many businesses are dragging their feet, not feeling completely contented with BTC instead of US Dollar on their accounts.
The country's hoping to attract investment and new citizens with its tech-friendly approach. But the IMF's not impressed. They've been critical of Bukele's Bitcoin bet from the get-go.
Bukele's not taking the criticism lying down. He's been slamming "global elites" and even tweeting memes mocking the IMF. Talk about a millennial leader, right?
Despite the back-and-forth, Bukele's told the IMF that Bitcoin adoption won't mess with the country's macroeconomics. They've been in talks for years about a loan to boost El Salvador's finances.
So you see, the first ever Bitcoin President has enough money to turn his country into a crypto whale, but not enough money to fight the actual problems in its economy. This seems weird to IMF, some other experts. And maybe, even some part of the population. But that yet to be determined.
El Salvador's government didn't immediately respond to questions. Looks like they're keeping mum for now.
The IMF's keeping the pressure on. They want El Salvador to play ball and be more open about their crypto moves. It's a high-stakes game, and the world's watching.