IMF spokesperson Julie Kozack calls for reducing public sector exposure to bitcoin.
The organization considers the 2025 budget proposal to be “a good step.”
When everything seemed to indicate that the International Monetary Fund (IMF) and Nayib Bukele’s government had ironed out differences in relation to the adoption of bitcoin (BTC) in El Salvador, there is information that seems to indicate the opposite.
This follows from the statements made by the organization’s Director of Communications, Julie Kozack, who in a press conference on October 3 admitted that the digital currency remains “key” in the negotiations who are moving forward to sign an agreement with the Central American country.
“What we have recommended is to limit the scope of the bitcoin law, strengthen the regulatory framework and oversight of the ecosystem, and limit the public sector’s exposure to bitcoin,” Kozack said, without offering details about the implications of these changes that they recommend for Salvadoran regulation.
However, considering the observations made by the IMF last August, when it announced that they had reached preliminary agreements, it is known that the Fund’s fear remains that the adoption of BTC becomes overcrowded in El Salvador, a panorama that they describe as “very dangerous.”
The main questions are asked to articles 1,7 and 8 of the Lawwhich place bitcoin as legal tender, promote its use as a means of payment and call on the State to favor transactions with BTC.
However, as the levels of cryptocurrency adoption among Salvadorans have so far been very low, the IMF considers that “many of the risks have not yet materialized.” Despite this, he insists that More efforts are needed to “mitigate fiscal and financial stability dangers.” that the bitcoin project proposes.
In that sense – despite the progress in the talks – the IMF indicates that additional discussions are necessary on the issue of bitcoin. Hence your request that its adoption be limitedespecially in the public sector.
Bukele makes changes, but does not touch the Bitcoin Law
Within the framework of the progress of negotiations with the IMF, the Bukele government has considered making changes to the regulation of cryptocurrencies, but without touching the Bitcoin Law.
The Legislative Assembly is currently debating a reform to the Digital Asset Issuance Law, through which it establishes mandatory registration for service providers (exchanges, custodians and payment processors), the implementation of KYC standards (know your customer), and cybersecurity measures. The objective is to act in accordance with the recommendations made by the Financial Action Task Force (FATF).
El Salvador thus seeks to comply with some of the Fund’s requests. As the Minister of Finance, Jerson Posada, declared a few days ago, they are trying to implement some of the measures that the organization taken into consideration to sign agreements. This includes the presentation of a self-financing budget for 2025, a measure that Julie Kozack called “a good step to strengthen public finances, which needs strong implementation.”
As reported by CriptoNoticias, the Minister of Finance assured that the negotiations with the IMF were well underway “and almost on the verge of being closed,” although He did not refer to the differences that continue to exist in relation to bitcoin.
The goal of El Salvador’s negotiations is to reach an agreement to implement a new program supported by the IMF, which will grant the country an influx of USD 1.3 billion that help economic stabilization and to make macroeconomic adjustments. On this topic, Kozack concluded that to achieve this “it will be necessary to make a series of reforms that promote growth.”
