RIYAD: The International Monetary Fund warned El Salvador against using bitcoin as an official offer given the risks associated with the cryptocurrency, a day after the country announced plans to create the world’s first Bitcoin city .
“Given the high price volatility of Bitcoin, its use as legal tender carries significant risks for consumer protection, financial integrity and financial stability,” the IMF said in a statement after concluding a mission to surveillance in this Central American country.
“Its use also gives rise to possible tax liabilities. Because of these risks, bitcoin should not be used as legal tender. “
The Washington-based lender thus recommended to “reduce the scope of the law on bitcoin” which made it the official currency and urged to “strengthen the regulation and supervision of the new payment ecosystem”.
The IMF statement came a day after President Nayib Bukele said El Salvador planned to build a volcano-fueled “Bitcoin city” funded by cryptocurrency bonds.
Crypto is not a fad
Australian Senator Jane Hume spoke on cryptocurrency and decentralized finance (DeFi) on Monday during her speech at the Australian Financial Review Super & Wealth Summit in Sydney.
Hume said they need to recognize that cryptocurrency is not a fad, adding that there are huge opportunities in decentralized finance (DeFi).
“So as an industry and as a government we have to recognize that this is not a fad. We have to move forward with caution, but not with fear, ”Hume said.
According to a new report from the Australian Senate committee, 17% of Australians invest in cryptocurrency.
“It’s an asset class that has captured hearts and minds, but beyond that – whatever you may think of it personally – it’s technology that’s not going to go away anytime soon,” he said. she declared.
Bitcoin, the main cryptocurrency in international trade, traded lower on Tuesday, falling 1.83% to $ 57,274 at 6:21 p.m. Riyadh time.
Ether, the second most traded cryptocurrency, traded at $ 4,296, up 1.25%, according to data from CoinDesk.