El Salvador is set to make merchant acceptance of Bitcoin voluntary, unwind its involvement in its little-used Chivo wallet and make public sector engagement of Bitcoin-related economic activity “confined” as part of a $1.4 billion loan deal with the International Monetary Fund (IMF). The Central American nation will get $1.4 billion from the IMF over the next 40 months after agreeing to measures aimed at dropping its debt-to-GDP ratio.
The IMF said, “The potential risks of the Bitcoin project will be diminished significantly in line with Fund policies. Legal reforms will make acceptance of Bitcoin by the private sector voluntary. For the public sector, engagement in Bitcoin-related economic activities and transactions in and purchases of Bitcoin will be confined.” El Salvador began buying Bitcoin in 2021 and currently holds 5,968.8 Bitcoin, worth approximately $602 million.
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