A former member of the U.S. intelligence community has suggested that El Salvador’s decision to use Bitcoin as legal tender is causing jitters inside the International Monetary Fund (IMF). Edward Snowden quote-tweeted an Agence France-Presse (AFP) tweet stating that the IMF had urged El Salvador to remove Bitcoin as legal tender, with the quip, “Somebody sounds nervous.”
The IMF Urges El Salvador to Cease BTC Legal Tender Tenure
The IMF has historically been seen as an instrument of the United States and its western allies to chart and control countries’ political and economic paths in the developing world. The economic policy conditions often attached as part of IMF loans and projects tend to undermine the sovereignty of borrowing nations by limiting their ability to make independent policy decisions, thus denying governments the ownership of their national development strategies.
In September last year, El Salvador introduced Bitcoin as legal tender alongside the U.S. dollar. This move meant that business establishments in the country were obligated to accept cryptocurrency as a means of payment. Bitcoin could be used to buy goods and services and to pay taxes and bank loans. To support the use of the digital token, the Salvadoran government installed more than 200 cash machines across the country. It gave each citizen a bitcoin wallet complete with $30 worth of bitcoin inside to spend as they saw fit.
Should El Salvador Hodl or Sell?
Salvadoran president Nayib Bukele also recently announced plans to build a Bitcoin city at the base of the Conchagua volcano, which will be the center of Bitcoin mining in the country. However, El Salvador’s continued dalliance with Bitcoin might scupper the highly impoverished Central American nation’s efforts to secure a $1.3 billion loan from the IMF.
El Salvador’s relatively successful experience with Bitcoin could encourage more governments worldwide to follow suit and give Bitcoin legal tender status. Various cryptocurrency bills that can make Bitcoin legal tender are being debated by legislators in countries like Ukraine, Cuba, and Brazil.
The trickle started by El Salvador could eventually become a torrent, and people like Edward Snowden believe that is what has the IMF nervous. It may be because Bitcoin undermines the global financial agency’s overarching influence in the politics and economies of developing countries.
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