After El Salvador’s parliament passed a historic bill to recognize Bitcoin as legal tender, the International Monetary Fund (IMF) has warned of “a number of macroeconomic, financial and legal issues” surrounding El Salvador making bitcoin legal tender.
El Salvador’s “Bitcoin Law” bill passed Congress by an overwhelming majority of 62 out of 84 votes. Consequently Bitcoin is now a legal tender in the country, and on equal footing with the U.S. dollar.
The IMF pointed to a number of economic and legal concerns on Thursday as an IMF spokesperson, Gerry Rice, said during a scheduled press briefing in Washington:
“Adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis so we are following developments closely and will continue our consultation with authorities. Crypto assets can pose significant risks and effective regulatory measures are very important when dealing with them.”
The IMF also met with El Salvador president Nayib Bukele on Thursday to discuss the recently passed bitcoin law and the effects it might have on a possible $1 billion funding program that the two already were in talks about.
Not only the IMF was quick to release some comments. United States banking giant JP Morgan released a note to its clients in which it stated that they see little economic benefit to El Salvador adopting Bitcoin as a legal tender to the U.S. dollar.
The note was released on Twitter by @DocumentingBTC.
JP Morgan on El Salvador adopting #Bitcoin
Notice the last line… pic.twitter.com/5hl0kR9WB0
— Documenting Bitcoin (@DocumentingBTC) June 11, 2021
The JPMorgan client note stated the following:
“As with the dollarization in the early-2000s, this move does not seem motivated by stability concerns, but rather is growth-oriented […] But it is difficult to see any tangible economic benefits associated with adopting Bitcoin as a second form of legal tender, and it may imperil negotiations with the IMF.”
However, just as @DocumentingBTC points out, JP Morgan concludes with a massive disclaimer leaving the Bitcoin community bullish:
“… but those moves may be complicated if this is the beginning of a broader trend among similarly situated, smaller nations.”
Earlier in the year, JP Morgan became the first large U.S. bank to offer Bitcoin to its clients. Not long after, the bank released a report in which analysts predict the Bitcoin price to reach as high as $130,000 as its decreased volatility would make the cryptocurrency more appealing to institutional investors.
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