El Salvador adds $1M in Bitcoin to reserves, raising holdings to 5,980.77 BTC after a $1.4B IMF deal.
IMF mandates limit El Salvador's Bitcoin policies, allowing voluntary use while unlocking $2B in global loans.
Chivo wallet to wind down as El Salvador shifts crypto policy but plans to continue Bitcoin purchases.
El Salvador has added $1 million in Bitcoin to its strategic reserves. This comes a day after the country signed a $1.4 billion agreement with the International Monetary Fund (IMF) that restricts government-led cryptocurrency activities.
https://twitter.com/BitcoinMagazine/status/1869898617609159148
The National Bitcoin Office reported the addition of 11 Bitcoin to the country's reserves, increasing the total to 5,980.77 BTC. With Bitcoin selling over $97,000, El Salvador's total Bitcoin reserve is now worth more than $580 million.
IMF Agreement Brings Policy Adjustments
Under the terms of the IMF agreement, El Salvador must make significant changes to its cryptocurrency policies. The government must minimize its direct engagement in Bitcoin transactions and restrict any similar activities. Businesses will no longer be compelled to accept Bitcoin, but may do so voluntarily.
Furthermore, the agreement states that taxes will only be payable in US dollars, reverting the previous policy of Bitcoin tax payments. In addition, the government intends to sell or wind down the Chivo crypto wallet. Private-sector wallets will continue to facilitate Bitcoin transactions in the country.
Continued Bitcoin Purchases Planned
Regardless of the IMF conditions, El Salvador aims to keep Bitcoin as part of its long-term economic strategy. The National Bitcoin Office hinted that Bitcoin purchases could be accelerated in the future. This decision highlights the government's ongoing support for Bitcoin, which has been legal tender in the country since 2021.
Financial Support Unlocks Additional Funds
The IMF agreement is awaiting final approval by the institution's Executive Board. If authorized, it will result in $2 billion in loans from the World Bank and the Inter-American Development Bank. These funds are intended for macroeconomic adjustments and structural reforms in El Salvador.
The agreement concludes years of negotiations strained by the country’s controversial Bitcoin policies. While it is a compromise, El Salvador remains committed to integrating Bitcoin into its financial ecosystem while adhering to international banking standards.
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