“El Salvador signs IMF loan agreement, $1.4 billion financing faces challenges to El Salvador's Bitcoin ambitions!”

Recently, El Salvador reached an agreement with the International Monetary Fund (IMF) to obtain a $1.4 billion loan to support economic reforms while limiting activities related to Bitcoin. This loan will be provided through the Extended Fund Facility (EFF), aimed at reducing the potential risks of Bitcoin to the country's economy. The IMF statement noted that Bitcoin-related economic activities will be strictly limited, and private sector participation in Bitcoin trading will be entirely voluntary.

At the same time, the El Salvador government has committed to gradually phasing out the use of the Chivo cryptocurrency wallet and enhancing regulation of digital assets to ensure financial stability and consumer protection. Moreover, taxes will continue to be paid in US dollars, and the El Salvador government will implement a series of fiscal measures, including reducing the budget deficit and increasing reserves.

These changes mark a shift in El Salvador's Bitcoin policy, even though the country is the first in the world to adopt Bitcoin as legal tender. The International Monetary Fund recommended as early as 2021 that El Salvador narrow the scope of the Bitcoin law and strengthen regulation. With the new loan agreement reached, El Salvador is balancing the development of digital currency with economic stability.

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