Nix Bitcoin as legal tender, IMF reportedly tells El Salvador

The nation adopted bitcoin as legal tender in June 2021. The International Monetary Fund is reportedly urging a rethink.

Corinne Reichert Senior Editor

Corinne Reichert (she/her) grew up in Sydney, Australia and moved to California in 2019. She holds degrees in law and communications, and currently writes news, analysis and features for CNET across the topics of electric vehicles, broadband networks, mobile devices, big tech, artificial intelligence, home technology and entertainment. In her spare time, she watches soccer games and F1 races, and goes to Disneyland as often as possible.

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I've been covering technology and mobile for 12 years, first as a telecommunications reporter and assistant editor at ZDNet in Australia, then as CNET's West Coast head of breaking news, and now in the Thought Leadership team.

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Corinne Reichert

Jan. 25, 2022 12:46 p.m. PT

Angela Lang/CNET

The International Monetary Fund is urging El Salvador to remove bitcoin as legal tender, according to reports Tuesday. The IMF board is also asking for more regulations around the state-sponsored e-wallet used in El Salvador.

Bitcoin became legal tender in El Salvador in June 2021, a move that sparked protests across the country in September. When the program launched, Salvadorans were able to use their national IDs to sign up for a cryptocurrency wallet app called Chivo, which came with $30 worth of bitcoin as part of the government's drive to adopt the cryptocurrency.

The IMF didn't immediately respond to a request for comment, but it reportedly said in statements that after a consultation, its board members "urged the authorities to narrow the scope of the bitcoin law by removing bitcoin's legal tender status."

The Bitcoin law in El Salvador ensured the "automatic convertibility" of bitcoin to dollars, but the highly volatile cryptocurrency peaked in November and has since halved in value as of this week.