The IMF issue plaguing El Salvador’s recent Bitcoin legalization has drawn attention from a US diplomat, who has hoped for a quick resolution of the matter.
US Official Supports El Salvador’s Bitcoin Legislation; Hopes For Financial Agreement
Victoria Nuland, the US undersecretary for political affairs, met with El Salvador President Nayib Bukele on Wednesday. She suggested that both the International Monetary Fund (IMF) and El Salvador reach a quick resolution by signing off on a financial agreement. Earlier this month, El Salvador became the first country to adopt Bitcoin as legal tender. President Nayib Bukele has touted its potential to help Salvadorans living abroad to send remittances back home.
IMF Sees Multiple Issues With Bitcoin Legalization
The IMF had expressed concerns regarding El Salvador’s move to legalize Bitcoin as acceptable tender, which could potentially be monumental for the Central American nation. Despite the ongoing discussions between the IMF and El Salvador, the former continues to be unconvinced of the huge financial decision taken by Congress.
According to Gerry Rice, an IMF spokesman,
“Adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis.”
Currently, El Salvador is in talks with the IMF, seeking a $1billion program. The fund’s representatives were scheduled to meet with the president on June 10th to discuss their concerns further. According to the IMF’s head of mission for El Salvador, Alina Carare, commented on the situation, saying,
“[The Fund is] following the news and will have more information as we continue our consultations with the authorities.”
Bitcoin Legalization To Pave The Way For Volcanic Energy Harvesting
Bitcoin’s highly energy-intensive mining operations could cause a potential energy crisis in El Salvador. Less than a day after the legalization, the President announced that they are looking into establishing a geothermal plant to keep up with the energy demands of the country’s mining activities.
He also said that this state-run geothermal energy utility would begin using power derived from volcanoes for Bitcoin mining. He followed up this announcement by tweeting that the country’s engineers have already dug a new well that will provide around 95 MW of 100% clean and zero emissions geothermal energy from the volcano and that they were planning to establish a full Bitcoin mining hub around the plant.
If El Salvador begins operating Bitcoin mining facilities powered by clean, cheap geothermal energy, it could become a global hub for mining and receive a much-needed economic boost in the process.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.