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.
Read more: El Salvador and Bitcoin: Everything you need to know
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.