El Salvador is set to ease its bitcoin policies and reduce the use of bitcoin in government transactions as part of a $1.4 billion loan agreement with the International Monetary Fund (IMF). The move comes after the IMF has repeatedly called on President Nayib Bukele to drop his bitcoin project, warning that the speculative nature of cryptocurrency could pose risks to the country. Under the terms of the IMF loan, El Salvador will "ease restrictions on the use of bitcoin in the private sector while prohibiting its use as legal tender or currency by the government," the IMF said. This means that businesses in El Salvador will still be able to accept bitcoin as payment, but the government will no longer be required to do so. The IMF has said that the risks associated with El Salvador's bitcoin adoption will be "significantly mitigated" under the new program. El Salvador was the first country in the world to adopt bitcoin as legal tender in September 2021. However, the move has been controversial, with critics arguing that it is too risky and could lead to financial instability. The IMF loan is expected to help El Salvador shore up its finances and reduce its reliance on bitcoin.

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