IMF’s Criticism of El Salvador for Adopting Bitcoin Reveals Its Concern About Becoming Obsolete

The success of Bitcoin in El Salvador could give ideas to other countries.

Just hours after El Salvador adopted Bitcoin as an official currency, the IMF (International Monetary Fund) reacted by criticizing the decision made by the country chaired by Nayib Bukele. It was obvious that the IMF was not going to stand by and watch a country embrace the Bitcoin revolution.

A quick reaction from the IMF was therefore to be expected. So was the tenor of its spokesman Gerry Rice’s remarks:

“Adoption of bitcoin as legal tender raises a number of macroeconomic, financial, and legal issues that require very careful analysis. We are following developments closely, and we’ll continue our consultations with the authorities.”

Gerry Rice’s second sentence suggests that the IMF will do everything it can to try to get Nayib Bukele to back down.

The IMF has every reason to be concerned about the first country to adopt Bitcoin as its official currency. If the IMF is worried, it is not for El Salvador and its people, but simply for its own sake. This prestigious international institution of 190 countries was born in July 1944 at the Bretton Woods Conference.

The initial objective of the IMF was to guarantee the stability of the international monetary system after World War II by preventing the world’s major economies from falling back into the situation of the 1930s, where currency devaluations and unilateral economic policy decisions had aggravated international tensions.

On August 15, 1971, the United States decided to unilaterally end the Bretton Woods system by suspending the convertibility of the U.S. dollar into gold. The famous cooperation that the IMF was supposed to foster was once again overridden by a unanimous American decision.

The original main role of the IMF, which was to guarantee the stability of the exchange rates within a margin of 1%, thus disappeared.

The adoption of the floating exchange rate regime in March 1973, i.e., based on market forces, put an end to the organized international monetary system. The IMF finally regained an official role on January 8, 1976, when its members signed the Jamaica Agreement, which allowed currencies to float.

The IMF’s first task was to support countries experiencing financial difficulties. When a country is facing a financial crisis, the IMF grants loans to guarantee its solvency and prevent a financial crisis from breaking out.

Since the establishment of the current system, we have the right to think that the IMF has not really succeeded in its mission. It does accompany countries in financial difficulties, but it does nothing more. A country like El Salvador receives aid from the IMF, but this does not change much in the daily lives of thousands of Salvadorans.

Faced with the IMF’s ineffectiveness, El Salvador’s President Nayib Bukele was entitled to seize an incredible opportunity that was presented to him. That opportunity is to choose to rely on Bitcoin to fix the country’s problems.

A major problem in the country is that 70% of Salvadorans have no access to banking services. Bitcoin will de facto solve this problem by providing basic banking services to thousands of people.

Bitcoin means hope for Salvadorans, but also the inclusion in a more equitable monetary system that is made to help the people, not to slowly but surely impoverish them over time.

The current system is not a protective system for the people. The value of the U.S. dollar has fallen by more than 85% since Richard Nixon established the current system in August 1971. At the same time, the price of an ounce of gold has risen from $35 to over $2000 in the summer of 2020.

The world needs a return to hard money. Bitcoin is that hard money that will change the game for hundreds of millions of people.

Aware of the risk of El Salvador succeeding in improving things in his country with Bitcoin, the entire global financial system will try to push Nayib Bukele back. Foreign investors, fearful that the IMF will challenge a $1 billion aid program with El Salvador, have pushed up El Salvador’s debt rates.

This is something typical of people who are afraid that Bitcoin will make them obsolete.

With a Bitcoin Standard like the one El Salvador is preparing to implement, the IMF would be useless. All it would take is for the rest of the world to choose to follow El Salvador’s lead. As you can see, the current situation is indicative of the fear of the powerful people in the face of the Bitcoin revolution, which has reached a new crucial point.

El Salvador must stand firm and continue to move in the right direction to change the game for its people. The IMF will only go along with the country without ever offering anything that will allow it to move to the next level. Bitcoin will be a game-changer for El Salvador.

Source: https://www.inbitcoinwetrust.net/imfs-criticism-of-el-salvador-for-adopting-bitcoin-reveals-its-concern-about-becoming-obsolete-1c9a03758fe6?source=rss——-8—————–cryptocurrency