The International Monetary Fund (IMF) and El Salvador have reached agreement on a US$1.4 billion loan program that will also facilitate additional financial support from the World Bank, the Inter-American Development Bank and other regional development banks, totaling more than 35 financing packages throughout the program period. billion dollars. But El Salvador needs to make major changes to its Bitcoin strategy.
El Salvador to adjust Bitcoin strategy
El Salvador became the first country in the world to list Bitcoin as legal tender in September 2021, and the IMF has opposed El Salvador's adoption of the digital currency, citing risks to financial stability and integrity. The IMF has repeatedly called on El Salvador to strengthen its regulatory framework and oversight of the national Bitcoin ecosystem.
In this negotiation, the IMF requested that El Salvador make the following adjustments to its Bitcoin strategy:
The private sector cannot accept Bitcoin as stipulated by law
The participation of the public sector in economic activities related to Bitcoin, as well as the trading and purchase of Bitcoin, will be restricted
Taxes can only be paid in USD
The government's involvement in the crypto wallet (Chivo) will be gradually phased out
There will be strengthened transparency, regulation, and oversight of digital assets to maintain financial stability, consumer and investor protection, and financial integrity
In addition, the Salvadoran government will also commit to reducing the budget deficit as a percentage of GDP by 3.5 percentage points within three years, while implementing spending cuts and tax increases. Through anti-corruption laws, the liquidity buffer required for banks must gradually reach 15%, aligning bank regulation with the Basel III standards of risk-based regulation.
El Salvador's daily investment in Bitcoin continues
President Nayib Bukele announced El Salvador's 'national wallet' this March, stating that 1 Bitcoin will be invested daily. According to Arkham data, El Salvador currently holds 5,969 Bitcoins, valued at approximately $607 million, showing that its daily investment plan is still ongoing!
Bukele recently showed off his return rate, which has reached 133.95%.
This article Salvador compromises! Commitment to adjust Bitcoin strategy to obtain IMF loans first appeared in Chain News ABMedia.
