Topic: [Update] IMF urges El Salvador to remove Bitcoin as legal tender - page 5. (Read 763 times)

the IMF have nothing to do with "trusting the dollar". their game is to set terms and conditions on countries that take loan dollars that allow the IMF to try punishing a country.

EG imagine(in simple human fiat terms)
 you took out a bank loan at 1% interest, but the terms&conditions was that you had to prove you worked for an employer paying you dollar to stay at the 1% rate. if found that you accepted euro income your interest rate becomes variable. and you also can have other penalty fee's added.
imagine on top of that you had to ensure that because your house was the collateral. you had to use 50% of the loan to renovate the home and pay your kids in a weekly pocket money allowance in dollars.
all of this is to try keeping you tethered to the dollar and need to generate MORE dollars to stay afloat and repay the loan.

what they dont want is for you to just start earning euros and claim dollar bankruptcy while holding euros offshore out of their jurisdiction, thus unable to seize your euro wealth.

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yes the IMF should get out of the game of trying to make it appear that the dollar is no.1 power/dependant currency. realise only 320m of 8bill (<5%) actually use it.. but then the IMF wont want to advertise that china and india are the actual big players. circulating their currency through billions of people(>12% each)

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heck im in the UK and i dislike that bitcoin exchange rate values bitcoin against the dollar. where the UK exchange then 'follows' the US rate, by looking at the forex and converting to then show a UK price..  rather than the UK have its own independent rate.
heck even stable coins are $ denominated. rather than having multiple stable coins for pounds, euro's etc.
so even the bitcoin exchanges has become dollar sheep.

if the bitcoin exchange was not so US centered. people could see a change in the forex rate. and buy bitcoin. sell at dollar rate then use dollars to arbitrage a USD to GBP. and through this arbitrage, bitcoin could actually ruin the wall street forex rate of dollar by 'selling' all the dollar for pounds. thus crashing the wallstreet dollar forex market.
but due to fears of influence. bitcoin exchanges dont do this, so stay 'happy friends' with us government.

imagine if in 2011 when exchanges first started. all exchanges valued bitcoin to chinese Yuan instead.. the US government would not be happy

Wall street and the central bankers are manipulating the bitcoin price and make a fortune with options trading because they are the ones controlling the liquidity now and can ripsaw the price in any direction to wipe out short or long positions but I don't think they will drop it much further however they are easily capable of frightening countries who adopt bitcoin without their blessing or appointed time to do so.

They are a huge organization that relies on dollars and so that's the reason why they're putting their trust in it instead of letting El Salvador do its thing alone, they want to intervene as it seems doesn't look for them. What's the matter if a country wants to adopt it as a legal tender and they actually have passed it and went through a process and made a bill for it. I think this is one of the reasons why many countries don't like to stand with these international orgs because they are trying to interfere with anything with almost everything.

The IMF and the cronies running it are scared.  Of course they want El Salvador to drop bitcoin because it takes control from the surveillance state kleptocrats and puts it in the hands of people.  Does El Salvador want to eventually be free of the international control freaks or does it want to be under their thumbs in perpetuity?

The answer should be: keep bitcoin and give it time.  The IMF has destroyed countries world wide with the insane policies it has recommended, trusting them now is like trusting any fiat currency to retain value.  As inflation in the US showed last year, they can't do it.  Bitcoin can over time.

yes
https://www.imf.org/en/About/Factsheets/Sheets/2016/08/02/21/28/IMF-Conditionality

in short when a country takes a loan. they are bound by the terms of the loan. such as a country has to then claw in enough tax income of the loaned currency to fill the government treasury of that currency. or has to offer the currency as social assistance to put it into circulation

thus making it dependant on that currency.

They may change their minds again once btc is going up. But can IMF dictate what El Salvador will do to their monetary system? This year, we will see how this country will stand on their ground towards their crypto journey. Maybe in the next months to come, they will disclose if they bought some BTC during this dip. Of course, they will be silent for now. But once the market is going bullish again, they may disclose what they have done during this period. El Salvador may be a living testament that btc can be a legal tender of a country if they play right.

IMF supports bitcoin and crypto for its utility.. but some IMF departments are the loan officers who are tasked to make sure countries repay their SDR debts. and its this loan office department that fears el-salvador trying to get its sovereignty back.

a lesson the IMF should do. is not want to peg/tie itself just to SDR(dollar) and instead have several vessels of reserve.
EG 'amero' 'brics' 'crypto'
where it can happily take in 3 designated currencies

EG
a commercial bank that only handles dollar, limits itself to a customer base of 320million people. yet a commercial bank that handles multiple international currencies has a potential customer base of near 8 billion.
so far the IMF is small minded trying to exagerate the dollars power/influence by trying to get all countries around the world to be tied to the dollar. even when in the real world only 5% of the world uses dollar daily

I think they're ready for it. Bukele has been buying every time the market drops and that signifies that they're pursuant to what they're doing for bitcoin and which they've adopted as a legal tender. AFAIK, IMF is a bitcoin supporter and that's from the articles that I've read years ago, maybe 2-4 years ago and now that they're questioning El Salvador to remove what they've decided to adopt bitcoin as a legal tender, isn't it that this is just a FUD and they want to give panic to the people so that everyone's going to sell and pull the prices down?

yes, media has over sold "bitcoin legal tender" as if el salvador has dropped the dollar. this is not the case. its instead added a second legal tender. adding options.
though at the moment the adoption and regular utility of this second option isnt much. the IMF fears the potential.
the potential is if the citizens moved their wealth over to bitcoin, and just stopped using dollar. then the IMF is screwed and wont get its debts to el salvador settled. though not a immediate threat. not a short term risk. the IMF is concerned about long term risk of long term loans not being repaid should el salvadorians prefer to use bitcoin instead of dollar

..
similar things were happening with UK/euro. because the UK didnt want to use the euro as a native currency. the euro banks didnt want to offer the UK euro loans. because if the UK is not circulating euro's then the euro banks have little chance of the UK generating enough euro to repay. thus allowing the UK a back door to exit out of by just claiming euro bankruptcy. whilst keeping the pound active for citizens in the UK

.. well then brexit happened and we left by another door. as we refused to join the euro, when asked again to drop the pound.

UK had a brexit. to cut ties with eurobank
i wonder if/when el salv' will do a IMF***off

Its part of the challenges that you would really face when you do make it as a legal tender and as a leader or president then you do know the risk since the first place and this is the time
on which it did really happen.Of course there would be other sentiments which would really make out those reactions specially they do know a certain country did really make it as a legal
tender and suggestions and words like these will surely float around but still it would depend on the leader of the country would be having that final decision.

From my perspective, having recently arrived in San Salvador, I think the IMF request is not unreasonable.

Bitcoin is not being used as legal tender here - it is a front for an Alipay-style centralised app and facial recognition database - and the experiment has more potential to do harm than good for bitcoin, and perhaps El Salvador.

As I understand it, El Salvador's policy has three main elements:
1. The introduction of the Chivo app;
2. The acquisition of bitcoin in FX reserves;
3. The issuance of the EBB1 bond and subsequent, related issues.

Of these, the first is not honest and not working. I haven't seen the app used here even once. The second is not going well, and a strategy of 'buy the dip' sounds unprofessional, but I think it can be prudently executed and the amounts involved aren't that significant. The third is the most interesting idea, but the devil will be in the detail.

In order to gain and maintain confidence in the bond issuance and FX strategy, suspending the Chivo experiment may be a wise move. At the moment, it wouldn't be a major loss and the only real question it would leave is who has gained access to the facial recognition database.

This is actually a big risk, he might be calling himself "world's coolest dictator", but if opposition will get control, which can very easily happen regardless of Bitcoin's influence on their economy, it would certainly mean Bitcoin will lose its status, maybe they will even ban it as some sort of overreaction, because we've seen how the opposition is criticizing Bukele's Bitcoin moves. So in some sense Bukele not only risked his country's money, but also Bitcoin's reputation, because if El Salvador will roll back Bitcoin's legal tender status, no other country would adopt in the next years.

part of the announcement was triggered because el-salvador requested a SDR loan of 1.3billion and the IMF said they want to monitor el-salvadors dollar holdings and try to get el salvador to agree to a plan to reduce its debt (start paying dollar to the IMF)
in short IMF is afraid el-salvador will claim bankruptcy and cut all ties to the dollar, and never repay.

..
this IMF fear is based on many US cities* have gone into bankruptcy to write off US parts of national debt. which then means the US then cant pay the IMF SDR back because less cities are paying the us treasury back.
IMF fears if too many cities/micronations do this bankruptcy option. then the IMF becomes dead.

*The city of Detroit, Michigan,filed bankruptcy on July 18, 2013. at $18–20 billion,
Vallejo, California, $18 million debt in 2008
Jefferson County, Alabama's $4-billion filing in 2011.
Orange County, California, at least $1.5 billion debt 1994
San Bernardino, California, more than $1 billion in debt in 2012
Stockton, California, $700 million debt 2012

Yea I'm not so sure El Salvador will pay too much attention to the IMF. It wasnt in the
IMF's interest at all that El Salvador made the move into Bitcoin and they got no
support from the IMF then.

I hope El Salvador stays strong and weathers all storms and bear markets until
the next halving in other words look to the medium to long term.

better link to source
https://www.imf.org/en/News/Articles/2022/01/25/pr2213-el-salvador-imf-executive-board-concludes-2021-article-iv-consultation

the IMF fears bitcoin as legal tender. because if all citizens shifted their income, wealth, savings to bitcoin. then el salvador wont have any dollar to play with to settle the IMF dollar debt. thus el salvador could claim BANKruptcy. to write off the dollar debt, while not affecting citizens pockets because they dont touch the dollar.

the IMF does not want to give out more dollar loans if the country is not tied to dollar to ensure they pay it back.

what the IMF is not realising is el salvador wants to get away from SDR (dollar) dependency.
what the IMF actually cares solely about is increasing a countries dependency on SDR

Ya, he seems to be at an all time high in clout, which seems to be part of his motivation.  Who knows, maybe the IMF will bribe him enough that life changing wealth means more to him then being a King of Clout.  I doubt it though.  He's riding high at the moment.

Interesting that the IMF has resorted to this though...  Maybe because they know that a second country is about to go on the Bitcoin standard and are now actively trying to stop this from eroding their influence on global finance.  The ball is rolling already though.  I expect we'll have an announcement on the second country to make Bitcoin a legal currency sometime in the next 3-6 months and that will undoubtably bring a new batch of coiners our way. 

Bukele will probably not falter. With the image he created on the internet about El Salvador's stance on bitcoin, and seeing how deep they are in the crypto scene, they would not let the impression of the people change at all. I wonder how he will try to mitigate their losses on bitcoin currently, but sure enough he would not publicly state that they will sell at a loss because that's just bad money management (and bad for their image, too).

From what I know they cannot dictate what a country/government has to do (unless it's the condition for a deal, but here it's not the case).
Hence I expect Nayib Bukele see it as an opportunity to play macho and say he doesn't give a fuck on IMF.

The real problems will come only if El Salvador will get to the point they cannot continue without financial help from outside. Then probably Bukele will lose his position, the coins will be sold, and bye-bye legal tender. It would be an extremely sad story; it would be much worse than if bitcoin never was legal tender there and - if we get there - it'll probably be also in times the price is crashing (or crashed) badly.


The impact on price now should be minimal. Or course, some may have the ammo prepared for a bigger-than-expected impact. Because that's how wild-wild-west trading goes.

IMF mounting pressure on El Salvador to remove bitcoin as a legal tender does not mean the country was not ready or it was a wrong choice. The policies of the IMF has also been heavily criticized on several occasions, so I would not rate that suggestion very highly.

I am more interested in how much longer they would hodl their bought bitcoin if the price keeps dropping.

Tough times create real leader! I am sure Nayib Bukele is going through one of the toughest times of his tenure. He is the one, who had taken a revolutionary decision to make bitcoin as a legal tender for his country even after tremendous criticism within the country. He held on to his decision and didn't change his mind during this entire transition.

Now more and more criticisms are following in because the price of bitcoin has gone down! We all know bitcoin is an extremely volatile asset. If we look at the recent past of 2017 and 2018, we can easily understand the level of volatility. But when we are standing on 2022, it's impossible for us to buy bitcoin at the price of late 2017.

I want to see how much criticism he will have to face when bitcoin price reaches another ATH in next few years. IMF is a centralized body so it's not the first time they have urged El-Salvador to reconsider their decision and I am sure they will try even in future as well. But the time will decide the winner really!