El Salvador reaches agreement with the IMF.
El Salvador recently announced that as part of the $1.4 billion loan agreement reached with the International Monetary Fund (IMF), the country will make significant adjustments to its Bitcoin policy, including changing the requirement for merchants to accept Bitcoin from mandatory to voluntary, the government will gradually withdraw from its participation in the national cryptocurrency wallet Chivo, taxes will be restricted to payments in US dollars, and Bitcoin-related economic activities in the public sector will be limited to a certain scope.
According to the statement issued by the IMF on December 18, the loan agreement will be disbursed in batches over the next 40 months, aimed at helping El Salvador reduce its debt-to-GDP ratio.
The Bitcoin accumulation plan remains unchanged.
Since 2021, El Salvador has been purchasing one Bitcoin every day. According to data from the national Bitcoin office, the country currently holds 5,968.8 Bitcoins, worth approximately $602 million. A spokesperson for the office emphasized that El Salvador will continue to accumulate Bitcoin.
We will continue to buy one Bitcoin every day (potentially more in the future), and we will not sell any of the Bitcoins we currently hold... Bitcoin remains our main strategy, and the related plans will not change.
The IMF has long opposed El Salvador's Bitcoin policy.
The agreement still requires approval from the IMF Executive Board, but this marks the end of four years of negotiations between El Salvador and the IMF. Since President Nayib Bukele announced Bitcoin as legal tender in June 2021, the IMF has warned that the speculative nature of cryptocurrencies could pose economic risks.
This agreement also includes additional loans from other global banks (such as the World Bank), with total financing exceeding $3.5 billion.
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