its use of the cryptocurrency to secure a $1.3 billion loan from the International Monetary Fund (IMF). Businesses will no longer be required to accept Bitcoin, and its use for tax payments and government transactions will be discontinued.
This policy shift comes after limited adoption of Bitcoin among Salvadorans, with most preferring the U.S. dollar. The IMF has consistently raised concerns about the financial risks of Bitcoin and recommended reducing public sector exposure to the volatile currency.
The move aims to address El Salvador's budget deficit, stabilize foreign reserves, and unlock additional funding from the World Bank and other institutions. While not an outright abandonment, the decision highlights the challenges of balancing cryptocurrency innovation with economic stability and global financial norms.
El Salvador's retrenchment from its Bitcoin experiment serves as a key lesson for nations eyeing large-scale cryptocurrency adoption.
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