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I.M.F. Urges El Salvador to End its Embrace of Crypto as Bitcoin Tumbles.

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Actual coins of the Bitcoin virtual currency.

El Salvador has spent about $85.5 million on Bitcoin since adopting the cryptocurrency as legal tender in September.

Credit: Benoit Tessier/REUTERS

The International Monetary Fund urged El Salvador on Tuesday to end its recognition of Bitcoin as legal tender. Adopting a cryptocurrency in this way "entails large risks for financial and market integrity, financial stability and consumer protection," the fund's executive board wrote.

The price of Bitcoin has fallen more than 50 percent from its peak in November, and the cryptocurrency market as a whole has lost more than $1 trillion in value over that time. For prominent institutions that have bought into Bitcoin, from El Salvador's government to some multinational corporations, the downturn could prove costly — and may create regulatory headaches, the DealBook newsletter reports.

A year ago, when the meme-stock frenzy was about to morph into a crypto boom, Bitcoin was worth just over $30,000. Since then, it has twice more than doubled in price and then given up the gains. Crypto evangelists like President Nayib Bukele of El Salvador, Elon Musk of Tesla and Michael Saylor of MicroStrategy seem undeterred.

From The New York Times
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