El Salvador to Change Bitcoin Policy for $1.3 Billion IMF Loan
In exchange for a $1.3 billion IMF loan, El Salvador is apparently making Bitcoin adoption optional.
According to the Financial Times, the deal removes the legal necessity for companies to accept Bitcoin. This addresses IMF financial worries about the country's economy.
Financial Issues in El Salvador El Salvador's Bitcoin policy change would be part of its IMF loan financing obligations. It wants to decrease expenditure and change taxes to lower its budget deficit by 3.5 percentage points of GDP over three years.
Two sources said an IMF delegation is in San Salvador to conclude the accord with President Nayib Bukele's government.
World Bank and Inter-American Development Bank funding of $1 billion each is envisaged from the arrangement.
The IMF has rejected El Salvador's legalization of Bitcoin, citing financial stability concerns. The country's 2021 Bitcoin payment legislation was a sticking point in IMF talks.
Nayib Bukele Promotes Bitcoin Under the new agreement, companies are no longer compelled to accept Bitcoin. To boost economic stability, the government will increase its financial reserves from $11 billion to $15 billion.
El Salvador has Bitcoin reserves, which President Bukele buys amid price drops. According to Bukele's social media postings, these reserves rose 127% to nearly $600 million last month.
According to the survey, although El Salvador has encouraged Bitcoin adoption to reposition itself as a worldwide crypto center, most Salvadorans still use the US currency for everyday transactions.
