Bitcoin and Ether trade higher; IMF urges El Salvador to abolish bitcoin as legal tender: Crypto Moves

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RIYADH: Bitcoin, the leading cryptocurrency internationally, traded higher on Wednesday, rising by 4.55 percent to $37,968 at 3:08 p.m. Riyadh time.

Ether, the second most traded cryptocurrency, was priced at $2,539, up by 5.19 percent, according to data from Coindesk.

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The International Monetary Fund on Tuesday called on El Salvador to change course and stop using bitcoin as a legal tender, citing the significant risks posed by the cryptocurrency.

The small Central American nation in September became the first country in the world to embrace the digital coin, allowing consumers to use it in all transactions, alongside the US dollar.

The call by the Washington-based financial organization came as the cryptocurrency dropped in value amid wider volatility on Wall Street in recent days, undoing much of the gains it had made during a record-setting climb in value last year.

The IMF staff had previously called on El Salvador’s President Nayib Bukele to reconsider putting bitcoin at the center of his country’s finances.

The latest pronouncement used much stronger language and came from the IMF’s board, which is composed of representatives of member governments including the United States.

The board’s directors “urged the authorities to narrow the scope of the bitcoin law by removing bitcoin’s legal tender status,” according to a statement.

In Tuesday’s statement from the board, they noted the fund supports the aim of “boosting financial inclusion” which could be advanced using the country’s “Chivo” e-wallet, but warned about the high levels of volatility in the cryptocurrency’s exchange rate.

Bitcoin’s value has shown some correlation with Wall Street equities, but pressure has also come from China’s crackdown on the trading and mining of cryptocurrencies, and also the risk of wider regulatory action from the likes of Europe and the United States.

Analysts also say it faces increased competition in 2022 from rival digital assets like ethereum.

Argentina

Binance, one of the leading cryptocurrency exchanges by volumes traded, has signed a sponsorship agreement with the Argentinian Football Association, allowing the company to become the main sponsor of all the Argentinian football teams on a global scale.

This agreement is the first one the exchange has inked with a worldwide national team, and will last five years, according to Bitcoin.com.

The agreement also seeks to promote the brand with one of the most successful football teams, offering cryptocurrencies to users and fans who may not have been familiar with these technologies.

“Through this agreement, we hope to support Argentine soccer at all levels and introduce Binance, the crypto world and the blockchain to soccer fans across the country and the world,” Maximiliano Hinz, director of Binance Latam said.

The signed partnership also includes the development and launch of a new fan token that will be released in the near future.

However, the Argentinian Soccer Association had already issued a fan token of its own, in partnership with Socios.com, a fan token company.

The release of the new token was criticized by the Socios platform, which issued a press release announcing its stance on this new deal that AFA signed with Binance.

According to sports media, Socios rejected this new deal, made just nine months after they had signed another deal with them that would last three years.

“We will do everything in our power to prevent this and to protect the rights of fans who purchased $ARG Fan Tokens. We are facing a flagrant breach of contract and we will take all the necessary legal measures to guarantee that AFA fulfills the commitments acquired with Socios.com,” Socios.com said.

The first token was launched on June 15 last year, selling more than 400k tokens at that time.

Indonesia

Indonesia’s Financial Services Authority — the Jakarta-based government agency known as OJK which regulates the financial services sector — warned Tuesday that financial companies are not allowed to offer or facilitate the sales of crypto assets.

The warning was conveyed by the chairman of the OJK Board of Commissioners, Wimboh Santoso, on the regulator’s official Instagram account.

“OJK has strictly prohibited financial service institutions from using, marketing, and/or facilitating crypto asset trading,” he said.

The regulator also warned the public when investing in crypto assets.

“Crypto-assets themselves are a type of commodity that has fluctuations in value which can go up and down at any time, so people must understand the risks,” the OJK stated.