Syed Rahman assesses the IMF’s approach to El Salvador’s use of Bitcoin

The International Monetary Fund (IMF) has asked El Salvador to remove Bitcoin’s status as legal tender in the country. This prompted Cointelegraph to ask Rahman Ravelli’s Syed Rahman for his thoughts on the matter.

The IMF has said that El Salvador’s adoption of Bitcoin as currency was creating risks for the financial markets as well as for consumers.

But Syed argued that the risks that the IMF has listed do not appear to be “a compelling enough reason’’ for its request, as there is not yet much evidence that Bitcoin is being used extensively for day-to-day transactions in El Salvador.

He explained that the IMF appears to be reacting to recent volatility in the markets, which has seen price drops for cryptocurrency and an apparent reduction in investor demand.

According to him, the IMF has been taking a “rather aggressive approach” to cryptocurrency-related products. Syed also pointed out that one other possible contributing factor to the IMF’s approach could be the deterioration in relations between El Salvador and the US.