According to Reuters, the International Monetary Fund (IMF) said in a statement after a visit to El Salvador that while risks associated with the country’s adoption of Bitcoin “have not materialized,” it still needs transparency and care.
The yearly visit by IMF experts came after El Salvador last month paid $600 million in bonds despite investor concerns over its funding sources and fiscal policy.
The adoption of Bitcoin as legal cash in El Salvador in September 2021 effectively shut down IMF financing.
The lender acknowledged that dangers “had not materialized due to the limited usage of bitcoin so far,” but said that given its status as legal tender and recent legislative changes intended to promote the use of crypto assets, such as tokenized bonds, the cryptocurrency’s “use could rise.”
“Given the legal risks, fiscal fragility and largely speculative nature of crypto markets, the authorities should reconsider their plans to expand government exposures to bitcoin,” the IMF said in a statement.
Last month, a law governing the issuing of digital assets by both public and commercial companies was passed by El Salvador’s Congress.
Before mid-November, when he declared that the Treasury would purchase one bitcoin per day, President Nayib Bukele announced on Twitter a series of purchases totaling about 2,380 bitcoin.
If those transactions had taken place, the government now owns roughly 2,470 coins that cost $106.4 million. That investment currently has a value of $52.2 million, representing a paper loss of nearly 50%.
One of the largest financial institutions in the world, JPMorgan, predicts that Shanghai, the next upgrade to Ethereum, would encourage more investors to stake their money in the protocol. According to the company, this figure may rise to 60% of the ether issued, which is already staked in other blockchain networks.
The planned Shanghai upgrade, which is expected to be implemented in March, may attract more capital to the network, according to a recent JPMorgan research.
According to the investment bank, Shanghai will increase Ethereum’s stake percentage by more than four times the amount of Ether that is now staked, bringing it to the level of other well-known proof-of-stake networks.
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