The International Monetary Fund (IMF) recently issued a series of warnings against El Salvador, regarding the adoption of bitcoin as a national currency.
The financial adviser and director of the agency’s marketing department, Tobias Adrian, together with the adviser of the legal department, Rhoda Weeks-Brown, indicated that the use of cryptocurrency could have a “significant” cost for the region’s economy.
“Government revenues would be exposed to exchange rate risk if taxes are priced in advance on a cryptoasset while expenses remain mostly in local currency, or vice versa,” the executives said.
On the other hand, they assured that monetary policy in general could lose strength, suggesting that the massive adoption of these assets could diminish the credibility of any country.
The IMF post does not specifically refer to El Salvador, which will begin accepting bitcoin as legal tender in September. Adrian and Weeks-Brown said that converting any cryptocurrency into a national currency “is an inadvisable shortcut” to obtain more inclusive financial services.