El Salvador has agreed to modify its Bitcoin policies as part of a $1.4 billion loan arrangement with the International Monetary Fund (IMF). The IMF confirmed that it had reached a staff-level agreement with El Salvador on a 40-month Extended Fund Facility (EFF) aimed at supporting the country’s economic reforms.
This loan marks a major milestone after nearly four years of negotiations. To secure the deal, El Salvador committed to implementing various reforms, including improving its primary budget balance by 3.5% of GDP over three years to reduce the public debt-to-GDP ratio from its 2024 peak of 85%. As part of these reforms, the use of Bitcoin by private businesses will become voluntary instead of mandatory, while public sector engagement in Bitcoin-related activities will be limited.
Tax payments will only be accepted in US dollars going forward. However, despite these changes, El Salvador remains committed to acquiring Bitcoin through its daily purchase strategy, which has resulted in significant profits.
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