The International Monetary Fund (IMF) sees financial and legal risks in El Salvador's recent decision to legalize bitcoin (EXANTE: Bitcoin) as a legal tender, Bloomberg has learned, citing the IMF spokesman Gerry Rice. The organization thinks that El Salvador's approval of bitcoin earlier this week requires "very careful analysis" as the country is seeking a more than $1 billion program.
Subscribe to our Telegram channel to stay up to date on the latest crypto and blockchain news.
"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," Rice said.
The IMF spokesman added that cryptocurrencies are considered by the organization as significant risk, which is why effective regulatory measures "are very important when dealing with them." As iHodl earlier reported, El Salvador's legalization of the cryptocurrency makes it possible for citizens to set prices and pay taxes in BTC.
However, for accounting purposes, the base currency will still be the US dollar. Transactions in bitcoin are not subject to capital gains tax, like any other transaction with means of payment.
Access more than 50 of the world's financial markets directly from your EXANTE account – including NASDAQ, London Stock Exchange and Tokyo Stock Exchange.