by Matthew Russell Lee, Patreon Book Substack
NYC, March 6 – When the IMF held its press briefing on March 6, Inner City Press was able to ask the spokesperson two questions about cryptocurrency, on El Salvador, including its recent purchase of Bitcoin, and on proposals in the US:
Inner City Press: on El Salvador... [and] contrast to the U.S. I mean, President Trump has announced a digital assets reserve, including Ethereum and other coins, as well as Bitcoin. And I wondered if the IMF could comment on the U.S. program or how would you distinguish the two countries and why the IMF might be taking a different approach?
MS. KOZACK: All right, let me go ahead and take the El Salvador question in Ethiopia and then we will go back. I see many hands up online. So, on El Salvador, as you know, last week our Executive Board approved a 40-month Extended Fund Facility, EFF, for U.S. $1.4 billion and with an immediate disbursement of $113 million. The program is expected to catalyze financial and technical support from other IFIs. And this will lead to a combined total over the program period of about U.S. $3.5 billion of support for El Salvador. The goals of the program are to restore fiscal sustainability, rebuild external and financial buffers, strengthen governance and transparency, and ultimately create the conditions for stronger and more resilient growth.
Regarding Bitcoin, in particular, the program aims to address the risks associated with the Bitcoin project to protect consumers and investors, as well as to limit potential fiscal costs. So, to start, there were recent legal reforms that have made the acceptance of Bitcoin voluntary, and taxes can be paid only in U.S. dollars. Under the program, the government has committed to not accumulate for their Bitcoins at the level of the overall public sector.
Regarding the recent increase in Bitcoin holding by the Strategic Bitcoin Reserve Fund, the authorities have confirmed that these are consistent with the agreed program conditionality, and we do remain engaged with the authorities on this important issue. And then, to your question. We are obviously closely monitoring President Trump's announcement in this area. The Presidential Working Group on Digital Asset Markets has not yet completed its work. So, we do not yet have details on the implementation of this proposal, but we will come back in due course
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