Not Good for Financial Stability, IMF Urges El Salvador to Abandon Bitcoin as Legal Tender

In its statement, the IMF also expressed concern about El Salvador issuing bitcoin bonds. Previously, El Salvador was planning to raise $1 billion through a so-called "bitcoin bond" in partnership with digital asset infrastructure company Blockstream.

Last November, the IMF wrote in a report that Bitcoin's higher price volatility could be detrimental to consumers and that Bitcoin is not suitable as a legal tender.

El Salvador has been working to secure a $1.3 billion loan from the IMF since 2021 - but both sides have fallen out over the bitcoin debate.