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IMF Urges El Salvador To Remove Bitcoin As Legal Tender

The International Monetary Fund pushes El Salvador to abandon bitcoin as legal tender.

The directors of the International Monetary Fund emphasized that the use of Bitcoin carries significant risks to financial stability, financial integrity, and consumer protection, as well as related fiscal contingent liabilities.

The report, released after bilateral talks with El Salvador, urged authorities to narrow the scope of their bitcoin laws by removing bitcoin’s status as legal tender. In September 2021, the Central American country became the first to adopt a cryptocurrency as legal tender alongside the USD.

In recent months, El Salvador’s President Nayib Bukele has added hundreds of dollars of Bitcoin to the country’s balance sheet. The president recently tweeted that he bought another $15 million in “very cheap” bitcoin as the cryptocurrency market tumbled. Bitcoin is down about 50% from its November all-time high.

The IMF report says that some directors have expressed concerns about the risks associated with issuing bitcoin-backed bonds. Meanwhile, It refers to the president’s plan to raise $1 billion through a “bitcoin bond” in partnership with digital asset infrastructure firm Blockstream.

How Adapted Are El Salvador Citizens To The New Crypto Ecosystem?

Part of El Salvador’s nationwide foray into bitcoin also includes the launch of a national virtual wallet called Chivo. The wallet offers free transactions and allows for fast cross-border payments. In El Salvador, 70% of citizens have no access to traditional financial services. Helpfully, Chivo aims to provide easy access for those who have never been involved in the banking system.

The IMF’s directors agreed that the Chivo e-wallet could facilitate digital payment methods and thus help promote financial inclusion. However, they also stressed the need for strict regulation and oversight. However, many El Salvadorans have reported identity theft cases. Hackers used their national ID numbers to open a Chivo e-wallet to claim a free government-provided $30 worth of bitcoins as a reward for opening the digital wallet.

Russia Lowers Interest Rates To 4.5%, Lowest Point since Post-Soviet Union Era

Russian Finance Ministry Officials Will Regulate, Not Restrict Cryptocurrencies

Russia may be softening its stance on cryptocurrencies in surprising comments from Russia’s financial policy chief. Finance director Ivan Chebeskov has come out to regulate crypto rather than ban it.

His endorsement is in response to the Russian central bank’s proposal to ban cryptocurrency mining and trading altogether.

The comments were made during the RBC Crypto Conference on Tuesday. Chebeskov said the Russian ministry is ready with a proposal to regulate digital assets and is waiting to hear the government’s position on the matter.

Before working in the Kremlin, Chebeskov worked in Russia and at the European Investment Bank, where he worked lucratively. He has been a student in the pro-Bitcoin state of Texas. Chekeskov has publicly expressed support for digital currencies in the past.

In his view, the digital ruble could compete with China’s central bank digital currency (CBD). In early January, the People’s Bank of China released a pilot version of the digital yuan wallet.

Elsewhere, the private sector was quick to condemn the proposal, which would ban Russia’s issuance, exchange, and circulation of cryptocurrencies.

For example, Telegram CEO Pavel Durov wrote on his messaging app Telegram that the proposed encryption ban would destroy many sectors of the high-tech economy.

The anti-crypto sentiment is rife in Russia’s neighbors. Citizens of Georgia have been asked to swear to stop mining cryptocurrencies. Additionally, top Bitcoin mining country Kazakhstan shut down the internet amid protests.

Given El Salvador’s recent state visit to Moscow and pro-crypto supporters like Chebeskov in the Kremlin, Russia could surprise the crypto industry in 2022.

Dogecoin

Elon Musk Encourages Mcdonald’s To Accept DOGE Payments

Serial entrepreneur and crypto tweeter Elon Musk appeared to be the catalyst for a double-digit rally in his favorite crypto pet project, Dogecoin.

Dogecoin surged at 7:30 a.m. on Tuesday. The CEOs of Tesla and SpaceX said: “If @McDonalds accepts Dogecoin, I’ll have a happy meal on TV.” At one point it rose more than 10%.

Almost immediately after the tweet, the price of the meme coin skyrocketed. The reason is that if a major food chain like McDonald’s decides to accept Dogecoin as a payment method, it would be a very bullish signal for the broader adoption of Dogecoin and the crypto space as a whole.

Mr. Musk’s tweet comes after cryptocurrency prices, including Dogecoin, have fallen sharply in recent days.

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