Very shocking news is coming to the Bitcoin sector due to an agreement between the Bitcoin-supporting country of El Salvador and the Bitcoin-hostile International Monetary Fund.
The International Monetary Fund (IMF) is an international financial institution. It provides financial assistance and policy advice to member countries to help them combat payment problems, usually due to economic instability, high inflation, or unsustainable debt levels. The IMF also provides loans to countries in need of financial support to stabilize their economies, but with certain conditions, for example, restructuring the country's economy.
On December 18, 2024, the International Monetary Fund (IMF) released the latest details of a loan agreement with the Central American nation of El Salvador. Under the terms of the agreement, El Salvador is limiting its participation in the national digital wallet for Bitcoin, Chivo, and is also leaving the focus on Bitcoin development to the public sector. This means that Bitcoin-related economic activity will remain largely confined to crypto-focused companies rather than government authorities. By strictly following the agreement, El Salvador will receive $1.4 billion from the IMF over the next 40 months.
The International Monetary Fund and the Government of El Salvador have reached a staff-level agreement on a 40-month EFF arrangement to support the government’s economic reforms. The agreement with 🇸🇻 is subject to approval by the IMF Executive Board.
— International Monetary Fund (@IMFNews) December 18, 2024
The IMF stated that “the potential risks of the Bitcoin project will be significantly reduced under the Fund’s policies. Legal reforms will make the acceptance of Bitcoin by the private sector voluntary.”
Many economists have noted that such agreements will not affect El Salvador’s view of Bitcoin and will give a better boost to the country’s economy. With this agreement, El Salvador’s debt-to-GDP ratio will drop significantly, which is a very good sign for the country’s economy.
Bitcoin price movements
Following this news, Bitcoin trading price collapsed by 5% in the past few hours. The current trading price of Bitcoin is $99,676.
The current trading price of Bitcoin is $99,673.
To control the level of panic among Bitcoin investors, the President of El Salvador confirmed that his country will continue to buy 1 Bitcoin every day.
El Salvador continues to mine 1 Bitcoin per day, every day. 🇸🇻🏆
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