IMF Report On El Salvador Is Positive… Except For Everything Bitcoin-Related
23 Novembro 2021 - 4:33AM
NEWSBTC
In a recent report, the IMF praises the way El Salvador handled the
COVID-19 situation and announces their economy grew 10% in 2021.
The International Monetary Fund also recognizes El Salvador’s
government efforts to reduce crime, “diversify the energy matrix,
foster economic diversification, and enhance financial inclusion.”
However, when it comes to Bitcoin, the IMF is completely against
it. As they should. Because Bitcoin renders them irrelevant. But
first, about the report titled “El Salvador: Staff Concluding
Statement of the 2021 Article IV Mission” “A Concluding Statement
describes the preliminary findings of IMF staff at the end of an
official staff visit (or ‘mission’), in most cases to a member
country. Missions are undertaken as part of regular (usually
annual) consultations under Article IV of the IMF’s Articles of
Agreement.” Anyway, let’s go to the IMF’s wacky opinions about
Bitcoin. BTC price chart for 11/23/2021 on Oanda | Source: BTC/USD
on TradingView.com What Does The IMF Think About Bitcoin As Legal
Tender? After praising El Salvador’s efforts to foster “financial
inclusion and raise growth,” the IMF attacks the very tool that the
country’s government is using to accomplish that. “Given Bitcoin’s
high price volatility, its use as a legal tender entails
significant risks to consumer protection, financial integrity, and
financial stability. Its use also gives rise to fiscal contingent
liabilities. Because of those risks, Bitcoin should not be used as
a legal tender. Staff recommends narrowing the scope of the Bitcoin
law and urges strengthening the regulation and supervision of the
new payment ecosystem.” Translation: The IMF can’t even think of
one good reason for Bitcoin not to be legal tender. One Bitcoin is
one Bitcoin. The cryptocurrency’s volatility is intrinsically
related to the assets we compare it with. In this case, the US
Dollar. It’s also important to remember that Bitcoin is legal
tender in El Salvador ALONGSIDE the US Dollar. If people don’t want
volatility, they can easily exchange all of their money into US
Dollars. The IMF also conveniently ignores the fact that
Bitcoin’s volatility can bring positive results for its users. And
that their other option, the US Dollar, is going through an
inflationary period like no other. Plus, when the US government
prints more money, its citizens get certain benefits out of it. But
El Salvador doesn’t. A Dollarized country that’s not in control of
the money printer gets its purchasing power decreased by relentless
inflation, but doesn’t get the airdrops and inorganic money
artificially stimulating the economy. Does The IMF Have Any Other
Advice? Of course, they do. After praising financial inclusion, the
IMF recommends implementing the exact same measures that keep 70%
of El Salvador’s population out of the financial system. “Stronger
regulation and oversight of the new payment ecosystem should be
immediately implemented for consumer protection, anti-money
laundering and counter financing of terrorism (AML/CFT), and risk
management.” Why are people in El Salvador unbanked? Do they think
it’s by choice? Is the IMF unaware that their outdated and
inefficient methods are causing the bottleneck? Bad actors have
incentives to bypass AML and KYC procedures. They do it with ease.
Normal people can’t produce all those documents. And for banks, the
cost of processing all that data makes acquiring a new client
expensive. There are no incentives to serve the lower-income
population. “Recently announced plans to use the proceeds of new
sovereign bond issuances to invest in Bitcoin, and the implications
of trading more broadly in Bitcoin, will require a very careful
analysis of implications for, and potential risks to, financial
stability.” Translation: What’s all this about a Bitcoin City?!!!!!
And they’re building a pet hospital?! ALERT! ALERT! The US Pauses
Relations With El Salvador In semi-related news, Reuters informs
that U.S. Chargé d’Affaires Jean Manes said in local TV that
relationships between the two countries are on hold. “Obviously
we’re on a bit of a pause because the government of El Salvador is
not giving a signal that it has an interest in our relationship,”
she said. “On behalf of the White House, the State Department,
we’ve offered a bridge, and the (Salvadoran) government decided not
to take it. As far as we’re concerned, we’re interested in having
the best relationship with El Salvador.” Sure, Manes. That sounds
totally believable. Nothing suspicious here. Featured Image:
AbsolutVision on Pixabay | Charts by TradingView
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