El Salvador's Economy Minister Reiterates the Country's Resolve to Hoard More Bitcoin BTC/USD

El Salvador's economy minister reiterated the country's resolve to hoard more Bitcoin BTC/USD Tuesday despite the International Monetary Fund's requirement to reduce exposure to the leading cryptocurrency.

El Salvador's economy minister has reiterated the country's resolve to continue buying Bitcoin (BTC) despite the International Monetary Fund's requirement to reduce exposure to the cryptocurrency.

What Happened: During an interview with Bloomberg, Maria Luisa Hayem highlighted Bitcoin as “an important project” that President Nayib Bukele is "very committed to."

When asked if the government was still buying Bitcoin, Hayem replied, "Yes, the president has talked about how they are keeping the strategy to continue accumulating assets."

Earlier this year, the IMF asked El Salvador to limit public sector bitcoin exposure as part of a $1.4 billion funding deal. However, Bukele has stated that the country will not cease buying bitcoin.

"It won't stop now, and it won't stop in the future," Bukele affirmed on X, formerly Twitter, in response to a news article.

El Salvador's bitcoin stockpile has reached 6,163.18 BTC, valued at over $584.47 million at current prices. The nation has added 30 BTC to its treasury in the past month.

Why It Matters: El Salvador made history in September 2021 by becoming the first nation to adopt Bitcoin as legal tender alongside the U.S. dollar.

The move was part of Bukele's broader strategy to diversify El Salvador's assets and generate income.

However, the cryptocurrency's price volatility and the IMF's recommendations pose challenges to El Salvador's economic recovery.

Earlier this year, the IMF advised El Salvador to sell some of its bitcoin holdings to mitigate risks.

"We understand that the authorities are committed to using bitcoin as part of a broader strategy to generate government revenue and diversify assets," the IMF said in a statement.

"However, we recommend that the authorities limit bitcoin-related fiscal risks and gradually reduce direct exposure to cryptocurrency price volatility."

See More: Best Cryptocurrency Scanners

Benzinga's View: El Salvador's experiment with Bitcoin has been a subject of much debate. Supporters highlight the potential for financial inclusion and economic growth, while critics point to the risks associated with cryptocurrency volatility and market manipulation.

Only time will tell how El Salvador's bold move to adopt Bitcoin will unfold and what impact it will have on the small Central American nation.

Bitcoin Price Action: At the time of writing on Tuesday, the price of Bitcoin was down by 0.16% over the last 24 hours at $94,767.23.

Photo Credit: mundissima on Shutterstock