How far will El Salvador go with its Bitcoin strategy, despite IMF objections?

🚨 Shocking News for Bitcoin Enthusiasts🚨
El Salvador, the first country to adopt Bitcoin as legal tender, has announced limitations on Bitcoin use at the government level in exchange for a $1.4 billion loan from the International Monetary Fund (IMF) over the next 40 months. This deal will reshape the nation's Bitcoin strategy while strengthening its economic reforms.
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What’s the Deal?
🔸 El Salvador will limit involvement in its national Bitcoin wallet, Chivo, and minimize public sector engagement in Bitcoin-related projects.
🔸 Bitcoin-related economic activity will remain focused on private businesses, keeping the government’s direct involvement minimal.
🔸 The IMF highlighted that this move aims to reduce risks tied to El Salvador's Bitcoin strategy.
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Why This Matters
The IMF has long been skeptical of Bitcoin, citing risks to economic stability. This agreement allows El Salvador to stabilize its debt-to-GDP ratio while ensuring economic reforms.
Experts believe this deal won't derail El Salvador's Bitcoin vision but will refocus it on private sector adoption, which could boost the economy in the long term.
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Bitcoin Price Impact
Following the announcement:
📉 Bitcoin dropped 5% and is now trading at $99,676.
💡 President Nayib Bukele reassured investors by committing to buying 1 Bitcoin daily for the nation, emphasizing long-term confidence in BTC.
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Economic Implications
✅ El Salvador’s debt-to-GDP ratio is expected to drop significantly.
✅ Private sector engagement in Bitcoin could foster innovation and new business opportunities.
✅ The deal may pave the way for El Salvador to attract foreign investments while stabilizing its economy.
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Community Reactions
🌍 Crypto enthusiasts are divided:
Some see this as FUD (Fear, Uncertainty, and Doubt) aimed at Bitcoin.
Others call it a strategic move for El Salvador to secure financial stability while holding onto its Bitcoin dream.
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Key Takeaways
✔️ El Salvador remains committed to Bitcoin adoption, even if government involvement is scaled back.
✔️ The $1.4 billion loan from the IMF is a short-term boost for economic stability.
✔️ Bitcoin's long-term outlook remains strong, driven by private sector innovation and continued accumulation by El Salvador.
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#Bitcoin #IMF #ElSalvador #CryptoNews

El Salvador bought 11 BTC, increasing its reserves to 5,980 BTC, worth around $580 million.

The IMF deal requires scaling back government Bitcoin activities, including shutting down the Chivo wallet.

Bitcoin remains legal tender, and El Salvador plans to continue buying Bitcoin for its reserves.

El Salvador has been purchasing 11 BTC for $1 million, a day after reaching a $1.4 billion loan agreement with the International Monetary Fund (IMF).

This purchase adds to the country’s growing Bitcoin reserves, totalling nearly 6,000 BTC, valued at around $580 million. However, this move comes at a critical moment when the country’s controversial Bitcoin policies are under scrutiny due to an agreement with the IMF that requires scaling back government involvement in cryptocurrency.

In 2021, El Salvador is the first country to adopt Bitcoin as legal tender. President Nayib Bukele championed this bold move to increase the country’s economy, especially in remittances and financial inclusion.

However, the adoption of Bitcoin has not been without challenges. A significant portion of the Salvadoran population has shown ignorance to embrace cryptocurrency. With surveys indicating that nearly 88% of citizens did not use Bitcoin in 2023.

Purchase of Bitcoin Despite IMF warning

Despite these challenges, El Salvador’s government has continued to invest in Bitcoin and plans to accelerate its purchases. According to Stacy Herbert, Director of the National Bitcoin Office, the government intends to keep buying Bitcoin. For its Strategic Bitcoin Reserve, potentially at a faster pace. This commitment to Bitcoin remains strong, even as the IMF has urged the government to scale back its activities.

As part of the loan deal, the IMF has imposed conditions that limit the government’s Bitcoin-related economic activities, including transactions and purchases. The country has agreed to the voluntary use of Bitcoin in the private sector, discontinuing the government-operated Chivo wallet and ensuring that taxes remain payable in US dollars.

These stipulations aim to address the risks associated with Bitcoin volatility, which the IMF views as threatening El Salvador’s economic stability.

The Chivo wallet, created by the government to facilitate Bitcoin payments, will be privatized or shut down. This marks a significant shift in the country’s approach to Bitcoin, moving away from government involvement in cryptocurrency services. However, the government has reassured the public that Bitcoin will remain legal tender and private-sector Bitcoin wallets will continue to serve Salvadorans.

This new phase in El Salvador’s Bitcoin journey highlights the country’s delicate balancing act: maintaining Bitcoin’s legal tender status and strategic reserve while adhering to IMF guidelines to ensure fiscal stability. As Bitcoin continues to be a part of the country’s economic strategy, it remains to be seen how these changes will impact the broader adoption of cryptocurrency in El Salvador.

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El Salvador has said it will continue to purchase Bitcoin (BTC), possibly at an accelerated rate for its strategic reserve despite a deal with the International Monetary Fund. 

El Salvador had agreed to modify its Bitcoin policy, limiting public sector involvement with the cryptocurrency and gradually phasing out its Chivo wallet.

El Salvador To Continue BTC Payment 

El Salvador has said it will continue buying Bitcoin, a day after reaching a crucial financing agreement with the International Monetary Fund (IMF). The IMF had insisted the country limit its exposure to the cryptocurrency. However, Stacy Herbert, El Salvador’s National Bitcoin Office Director, has said Bitcoin will remain legal tender in the country, and it will keep buying BTC to add to its strategic reserve. 

El Salvador reached a $1.4 billion loan deal with the IMF. As part of the agreement, the country agreed to scale back its Bitcoin policy and make crypto payments voluntary instead of mandatory. The deal also specified that tax payments would only be made in the other official tender, the US Dollar. The IMF also wants the government to phase out its Chivo wallet. The IMF stated, 

“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.”

In addition to the $1.4 billion loan, El Salvador is also expected to secure $3.5 billion in financing from other global financial institutions, including the World Bank. Responding to the IMF’s announcement, Bukele’s Bitcoin advisor Max Keiser, dismissed the criticism of its Bitcoin policy as “bureaucratic” and “meaningless.”

El Salvador started purchasing Bitcoin in 2021, giving it legal tender status and becoming the first country to do so. It currently holds 5968 BTC, valued at around $632 million. Despite the country’s bullishness on the asset, an October survey revealed 92% of Salvadorans do not use the asset. 

Countering Negative Blowback 

According to Eugene Epstein, the head of trading and structured products for North America at Moneycorp, the government’s announcement about accelerating the purchase of more Bitcoin could be to counter any negative blowback from a perceived diminished status cryptocurrency's status in the country. 

“Given the size and likely the terms of the IMF deal, it was probably worth it for (Bukele) to do that.”

El Salvador President Nayib Bukele has been hyping up the country as a Bitcoin and digital asset trading hub. It also hosted an “Adopting Bitcoin” conference, and is home to the “Bitcoin Beach,” a surfing spot where businesses accept Bitcoin payments.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The post Why Crypto Market is Down Today? Bitcoin below $95,000  appeared first on Coinpedia Fintech News

Bitcoin has sent the community in shock by nose diving 11.25% in the past 3 days. It lost almost $12,000 from its value and is currently trading at $94,715 and the crypto market faced a $1.10 billion liquidation. This is a great time for bears while long traders are paying hefty prices. Let’s see what is happening and why crypto market is down today.

El Salvador’s $1.4 B Loan

El Salvador being the first country in the world to accept Bitcoin as a legal tender, has been receiving backlash from traditional institutions. The International Monetary Fund (IMF) has been warning the nation to change their Bitcoin policy. They have been urging El Salvadore to limit public sector exposure to the crypto however, the nation never listened. 

Now, there is a deal between the Bitcoin country and the IMF, a loan of $1.4 billion to support their economy. This still has to be approved however, there is a condition, they will have to bring amends to the Bitcoin policy. The country has accepted the proposal. Experts believe this was the major reason for the drop, however charts add more to the story.

The Bitcoin Market Analysis

BTC made a new all time high at $108,364 on December 17 and since then it has been falling. Coinmarketcap shows that the first crypto is down from its ATH by 12.74%. Currency BTC hovers around a daily support level but it would be very difficult to say if it is going to survive here.

Source : Tradingview

However the 4 hour chart says a different story. RSI has dropped below 30, suggesting we should soon see an uprising. This is the perfect moment for whales to refill their bags on discount. 

The most interesting thing lies in the daily chart. We are not going to talk about numbers here but just patterns. If you compare the movement of price with RSI movement, you will see it. Even though the price was moving up from $89k all the way to the new ATH, the RSI kept falling down.

Source : Tradingview

This diversion in their movements was giving the alert of this price drop. This should clear the doubts about why crypto market is down today. And as the price is coming down, soon it will balance with RSI and bounce back.

The Damage?

As Bitcoin leads the crypto market, its movements influence alts. With this crash,  the crypto space lost around 9.31% of its market cap which is now at $3.21T. The trading activity is up by 13.77%because of the short traders.

Source : Coinglass

The figures say it all. In the last 24 hours, around 334k traders got liquidated and lost around $1.10 billion of funds. The biggest liquidation happened for the ETH/USDT pair with a value of $15.80 million. $929.16 million were lost to long trades as the market took a nosedive.

What to Expect?

The crypto market is full of surprises. The community is expecting Bitcoin to hold its fall and climb back. The market is waiting for big buys now. Whales tend to accumulate assets when the market dips. The current zone is the last remaining support, if the price falls more, it can go to $91,900 that has moving average 20 lying there. These are the times when traders are advised to stay extra aware of the market and protect their funds. Not every time is a good time for trading.

In an unexpected twist, El Salvador, a pioneering country in adopting Bitcoin, has agreed to limit its involvement with the cryptocurrency at the government level, in a move that shocked the crypto world! 🪙🔻
On December 18, 2024, the IMF and El Salvador reached a staff-level agreement for a $1.4 billion loan deal that will reshape the country's Bitcoin strategy. 🇸🇻 The agreement calls for reducing the government's focus on the national Bitcoin wallet Chivo, shifting responsibility to crypto-focused businesses instead of public sector initiatives. The IMF aims to significantly diminish the risks tied to Bitcoin, with private sector acceptance to become voluntary. 📉
This decision has caused Bitcoin prices to tumble by 5% in just hours, with the current trade price of Bitcoin dipping to $99,676. 💥 The market is reacting with caution, but the President of El Salvador has reassured investors, reaffirming the country's commitment to stacking 1 Bitcoin every day! 📈
Despite the backlash, economic experts believe this could benefit El Salvador’s economy in the long run, as the country stands to reduce its debt-to-GDP ratio and stabilize its finances. But, the question remains – is this the end of El Salvador’s Bitcoin dream, or is it just a new chapter? 🤔
Stay tuned as this high-stakes financial drama continues to unfold! 🌍💥
#ElSalvador #IMF #CryptoNewss #BTC☀

El Salvador has reached a preliminary arrangement with the International Monetary Fund (IMF) on a $1.4 billion loan. Under the agreement, the government must adopt several key measures to ensure that it can effectively use the funds to support its economic reform agenda, including some adjustments to its Bitcoin policy.

The country still buys one Bitcoin per day, now holding 5,969 BTC worth around $600 million.

Stacking!

Subject to IMF Executive Board approval, the deal would require El Salvador to implement measures to reduce government spending and improve its primary balance by approximately 3.5% of GDP over three years. The program is expected to help put the country’s public debt-to-GDP ratio on a downward trajectory after it peaks at 85% in 2024.

As part of the agreement, El Salvador would also agree to restrict the government’s use of Bitcoin and limit public sector participation in Bitcoin-related activities. This likely includes restrictions on using Bitcoin for government transactions and limiting the use of the Chivo wallet, the government-backed Bitcoin wallet.

Businesses and individuals will no longer be obligated to accept Bitcoin as legal tender; the country is making Bitcoin Bitcoin acceptance voluntary. These reforms are aimed at reducing risks associated with Bitcoin as a legal tender, which have long been a major concern to the IMF.

El Salvador, under the leadership of President Nayib Bukele, became the first nation to embrace Bitcoin as legal tender in September 2021. The landmark decision has enabled the country to use Bitcoin, alongside the U.S. dollar, for everyday transactions.

The IMF initially called for El Salvador to completely reverse Bitcoin’s legal tender status. However, it appears that the organization now focuses on urging the country to strengthen its regulatory framework surrounding Bitcoin.

The IMF has consistently warned that the legalization of Bitcoin poses risks to financial stability, market integrity, and consumer protection due to its volatile nature. The organization has urged El Salvador’s government to narrow the scope of the Bitcoin law, which involves limitations of public sector exposure to the cryptocurrency.

In recent discussions, the IMF continued to raise concerns about risks associated with Bitcoin. The entity noted that while those had not yet materialized, ongoing efforts were necessary to enhance transparency and mitigate potential fiscal and financial stability risks linked to its use.

Push For Bitcoin Adoption Is Largely Negative

Initial enthusiasm surrounding Bitcoin’s legalization has faded in the country that pioneered the national acceptance of the largest cryptocurrency. Bitcoin has seen limited adoption since it was made legal money in 2021.

Economic, social, and technological barriers have limited the effective use of Bitcoin among Salvadoran people. The challenges exist despite the government’s efforts to drive adoption, through the introduction of the Chivo wallet.

The app designed to facilitate Bitcoin transactions, recorded low user engagement. Reports showed that 61% of Chivo users stopped using the app after spending their sign-up bonus of $30 in Bitcoin.

On the business front, surveys showed that only about 20% of businesses accepted Bitcoin as a form of payment by 2022. While some businesses in tourist areas reported increased activity from cryptocurrency tourists, overall usage remained low, and many reports indicated that Bitcoin had not efficiently boosted tourism or economic growth as initially hoped.

Yet, that does not stop the government from accumulating Bitcoin. El Salvador is still buying one Bitcoin per day. The country has continued this policy regardless of market conditions. President Bukele has stated that the government would maintain these daily purchases until it becomes infeasible to do so with fiat currency.

As of latest data tracked by Arkham Intelligence, El Salvador has acquired 5,969 BTC worth around $600 million. As the market pumps, the nation looks smarter all the time.

The post El Salvador to Secure $1.4 Billion IMF Deal, Bitcoin Acceptance Becomes Voluntary appeared first on Blockonomi.

El Salvador Adjusts Bitcoin Policies to Secure $3.5 Billion IMF Deal

El Salvador, the first country to adopt Bitcoin as legal tender, has made significant adjustments to its cryptocurrency policies as part of a $3.5 billion funding agreement. This deal includes $1.4 billion from the International Monetary Fund (IMF), marking a pivotal step in the nation’s financial strategy while maintaining Bitcoin’s legal tender status.

Bitcoin Policy Changes for IMF Compliance

El Salvador’s government has agreed to modify several aspects of its Bitcoin policies to meet the IMF’s conditions for funding. These changes include:

State-Run Chivo Wallet: Plans to either sell or dismantle the government-managed Chivo wallet, which previously played a key role in Bitcoin transactions.

Voluntary Bitcoin Acceptance: Private-sector businesses are no longer required to accept Bitcoin as payment, making participation entirely optional.

Tax Payments in USD: All tax obligations must now be settled in U.S. dollars, moving away from Bitcoin as an alternative payment method for taxes.

Despite these concessions, Bitcoin will remain legal tender in El Salvador, and the government will continue its strategy of acquiring and holding Bitcoin in its national reserves.

El Salvador’s Bitcoin Reserves

As of now, El Salvador holds 5,968 BTC, valued at approximately $596 million. The government plans to bolster its Bitcoin reserves, leveraging the cryptocurrency’s long-term growth potential.

While Bitcoin-related initiatives are being restructured, education programs and the development of cryptocurrency capital markets will proceed as planned, aiming to position El Salvador as a leader in digital currency innovation.

Balancing Bitcoin Adoption and Economic Stability

El Salvador’s bold experiment with Bitcoin has garnered international attention but also faced criticism from global financial institutions. The IMF had previously raised concerns about the risks associated with Bitcoin adoption, including financial instability and potential misuse for illicit activities.

By implementing these policy changes, El Salvador seeks to strike a balance between its ambitious Bitcoin strategy and the requirements of traditional financial systems.

Key Impacts of the Policy Adjustments

1. Chivo Wallet Restructuring

The Chivo wallet, designed to facilitate Bitcoin transactions, has been at the center of El Salvador’s Bitcoin adoption strategy. However, technical issues and low adoption rates among citizens prompted the government to rethink its approach. Selling or dissolving the wallet will align with the IMF’s recommendations while allowing private enterprises to step in with alternative wallet solutions.

2. Voluntary Bitcoin Acceptance

Allowing businesses to opt out of accepting Bitcoin could improve relations with private-sector stakeholders, many of whom had expressed concerns about mandatory adoption. This move aligns El Salvador’s policies with global norms, where cryptocurrency usage is typically voluntary.

3. Taxation in USD

Requiring taxes to be paid in U.S. dollars reduces the risks of price volatility associated with Bitcoin, providing greater stability for public finances.

Future of Bitcoin in El Salvador

Despite these changes, El Salvador remains committed to Bitcoin as part of its economic strategy. The government’s continued acquisition of Bitcoin reflects confidence in the cryptocurrency’s potential as a store of value.

Additionally, initiatives to educate citizens about cryptocurrency and foster a robust capital markets ecosystem highlight the government’s broader vision for integrating digital currencies into the economy.

Global Reactions to El Salvador’s Bitcoin Policies

El Salvador’s Bitcoin journey has been met with mixed reactions on the global stage. Advocates praise the nation’s pioneering efforts to embrace financial innovation, while critics highlight the economic risks and challenges of implementing a national cryptocurrency strategy.

The recent concessions to the IMF may alleviate some concerns among international stakeholders, potentially paving the way for further financial support and investment.

FAQs About El Salvador’s Bitcoin Policy Adjustments

What changes are being made to El Salvador’s Bitcoin policies? The government is ending or selling the state-run Chivo wallet, making Bitcoin acceptance voluntary for private businesses, and requiring taxes to be paid in U.S. dollars.

Is Bitcoin still legal tender in El Salvador? Yes, Bitcoin remains legal tender in El Salvador despite the policy adjustments.

Why is El Salvador making these changes? The changes are part of a $3.5 billion funding agreement, including $1.4 billion from the IMF, which required adjustments to Bitcoin policies for compliance.

What will happen to the Chivo wallet? The government plans to either sell or shut down the Chivo wallet, allowing private solutions to fill the gap.

How much Bitcoin does El Salvador currently hold? El Salvador holds 5,968 BTC, valued at approximately $596 million.

Conclusion

El Salvador’s revised Bitcoin policies demonstrate its commitment to balancing innovation with economic stability. By addressing global concerns and securing significant funding, the nation aims to strengthen its economy while maintaining its pioneering role in cryptocurrency adoption.

As the world watches El Salvador’s bold experiment unfold, the adjustments to its Bitcoin policies may serve as a model for other countries exploring the integration of digital assets into their financial systems.

To learn more about the innovative startups shaping the future of the crypto industry, explore our article on latest news, where we delve into the most promising ventures and their potential to disrupt traditional industries.

TLDR

El Salvador secured a $1.4B IMF deal while maintaining Bitcoin as legal tender

The country holds 5,968 BTC (worth ~$594M) and plans to accelerate purchases

Private businesses will no longer be required to accept Bitcoin payments

Government will phase out state-backed Chivo wallet while supporting private options

Bitcoin education initiatives expanding with new programs planned for 2025

El Salvador’s stance on Bitcoin enters a new phase as the country secures a $1.4 billion loan agreement with the International Monetary Fund (IMF) while maintaining its commitment to cryptocurrency adoption. The deal, finalized on December 18, 2024, introduces changes to the country’s Bitcoin policies while preserving its status as the first nation to adopt Bitcoin as legal tender.

The National Bitcoin Office, led by Stacy Herbert, announced that El Salvador plans to continue and potentially increase its Bitcoin purchases. The country currently holds 5,968 Bitcoin in its strategic reserve, valued at approximately $594 million based on current market prices.

Under the new IMF agreement, El Salvador will modify some aspects of its Bitcoin law. Private businesses will no longer be required to accept Bitcoin as payment, making cryptocurrency transactions voluntary for the private sector. Additionally, the government will only accept tax payments in US dollars going forward.

The government plans to phase out its state-sponsored Chivo wallet, which initially provided citizens with $30 worth of Bitcoin in 2021. This move aims to encourage the development of private Bitcoin wallet services in the country.

Despite these adjustments, El Salvador’s educational initiatives around Bitcoin continue to expand. The government is preparing to introduce Bitcoin workbooks for second and third-grade students by January 2025. These materials will complement existing programs such as “Mi Primer Bitcoin” and Node Nation, which provide cryptocurrency education at the high school level.

The country is also moving forward with a certification program designed to train 80,000 civil servants through the ESIAP initiative, demonstrating its commitment to building Bitcoin expertise within the government workforce.

In the financial sector, El Salvador has begun exploring new applications of blockchain technology. Recent developments include the tokenization of US Treasuries on the Liquid Network, a project completed in partnership with NexBridge. The government indicates that more Bitcoin-related capital market initiatives are in development.

EL SALVADOR SECURES $3.5 FUNDING DEAL

Bitcoin remains legal tender
El Salvador will continue buying bitcoin (at possibly an accelerated pace) for its Strategic Bitcoin Reserve
Bitcoin capital markets will continue to be built; for example, the recent tokenized issuance…

— Stacy Herbert (@stacyherbert) December 19, 2024

IMF spokesperson Julie Kozack confirmed the terms of the agreement, which represents a compromise between the international organization’s concerns about cryptocurrency risks and El Salvador’s innovative approach to digital assets.

President Nayib Bukele, who spearheaded the country’s Bitcoin adoption in 2021, maintains strong popular support among Salvadorans. This backing stems largely from his administration’s success in reducing crime rates, although polls indicate that citizens remain largely neutral regarding Bitcoin adoption.

The government’s Bitcoin holdings have been tracked through public blockchain data, with SpotOnChain confirming the official wallet contains over 5,900 BTC. Herbert emphasized that these holdings will continue to be maintained and potentially increased as part of the country’s strategic reserve.

El Salvador’s bond market has responded positively to recent developments. The country’s dollar-denominated bonds have seen a rally following the government’s offer to buy back notes from nine different transactions.

The IMF agreement marks a new chapter in El Salvador’s cryptocurrency journey, balancing international financial cooperation with its digital asset strategy. While some aspects of the original Bitcoin law are being modified, the core elements of the country’s cryptocurrency adoption remain intact.

Herbert’s statements on social media platform X confirm that Bitcoin will continue as legal tender alongside the US dollar. The government maintains its vision of positioning El Salvador as a hub for cryptocurrency innovation, even as it adapts to new regulatory requirements.

The immediate effects of these policy changes are yet to be seen, but the government has outlined clear plans for implementation. Private sector businesses will transition to voluntary Bitcoin acceptance, while public sector cryptocurrency activities will face new restrictions under IMF guidelines.

The post El Salvador Reaches $1.4B IMF Deal, Continues Bitcoin Holdings appeared first on Blockonomi.

El Salvador Plans to Expand Bitcoin Reserves: A Strategic Move in 2024

El Salvador, the first country to adopt Bitcoin as legal tender, has announced its intention to increase its Bitcoin reserves. This decision reflects a renewed commitment to its Bitcoin strategy, even as the nation adjusts its cryptocurrency policies under the terms of a $1.4 billion loan agreement with the International Monetary Fund (IMF).

This move signals a potential acceleration of Bitcoin acquisitions, highlighting the country’s dedication to cryptocurrency as a cornerstone of its financial strategy.

El Salvador’s Bitcoin Journey: A Brief Recap

In 2021, El Salvador made headlines by adopting Bitcoin as legal tender, aiming to transform its financial ecosystem. The decision was met with global scrutiny, but the government, led by President Nayib Bukele, embraced the cryptocurrency with enthusiasm.

Key Developments So Far:

Bitcoin Adoption: Businesses were required to accept Bitcoin alongside the U.S. dollar.

Chivo Wallet: A state-backed digital wallet was launched to facilitate Bitcoin transactions.

Bitcoin Bonds: The government introduced Bitcoin-backed bonds to fund infrastructure projects, including a proposed “Bitcoin City.”

While these initiatives attracted global attention, they also drew criticism from international organizations like the IMF, which raised concerns about financial stability and transparency.

IMF Agreement and Policy Adjustments

In 2024, El Salvador reached a $1.4 billion loan agreement with the IMF. As part of the deal, the country agreed to ease its Bitcoin-related policies, particularly those involving public sector trading activities.

Policy Changes:

Scaling Back Public Trading: The government reduced direct involvement in Bitcoin trading to address IMF concerns.

Focus on Strategic Reserves: The emphasis shifted to maintaining Bitcoin as a reserve asset rather than a primary trading vehicle.

These changes were aimed at striking a balance between leveraging Bitcoin’s potential and addressing global financial concerns.

Renewed Focus on Bitcoin Reserves

Despite policy adjustments, El Salvador remains committed to expanding its Bitcoin reserves. According to Watcher Guru, the government plans to purchase Bitcoin at a faster rate, signaling confidence in the cryptocurrency’s long-term value.

Why Increase Bitcoin Reserves?

Hedging Against Inflation: Bitcoin’s fixed supply makes it an attractive hedge against inflation and currency devaluation.

Attracting Investments: Strengthened reserves could signal financial innovation, attracting global investors and cryptocurrency enthusiasts.

Economic Sovereignty: Bolstering Bitcoin reserves aligns with the government’s vision of reducing reliance on traditional financial systems.

Challenges and Opportunities

Challenges:

Volatility: Bitcoin’s price fluctuations pose risks to financial stability.

Global Scrutiny: The move may attract criticism from international organizations and traditional financial institutions.

Domestic Concerns: Critics within El Salvador argue that Bitcoin adoption has yet to deliver promised economic benefits.

Opportunities:

Positioning as a Crypto Hub: By doubling down on Bitcoin, El Salvador could strengthen its position as a global leader in cryptocurrency adoption.

Tourism and Innovation: The country’s Bitcoin-friendly policies have boosted tourism and fostered blockchain innovation.

The Road Ahead for Bitcoin in El Salvador

El Salvador’s renewed focus on Bitcoin reserves underscores its belief in the cryptocurrency’s potential to drive economic transformation. However, the country must navigate the complexities of balancing its ambitious Bitcoin strategy with international financial obligations.

Potential Outcomes:

Economic Growth: If Bitcoin prices rise, the increased reserves could significantly bolster El Salvador’s economy.

Increased Adoption: A stronger reserve could encourage wider adoption of Bitcoin domestically and internationally.

Regulatory Challenges: The country may face continued scrutiny from global financial institutions.

FAQs About El Salvador’s Bitcoin Strategy

Why is El Salvador increasing its Bitcoin reserves? The government believes Bitcoin offers long-term economic benefits, such as inflation protection and reduced reliance on traditional financial systems.

How does the IMF loan impact El Salvador’s Bitcoin policies? As part of the $1.4 billion loan agreement, El Salvador has scaled back public sector Bitcoin trading while maintaining its focus on strategic reserves.

What are the risks of increasing Bitcoin reserves? Bitcoin’s price volatility could lead to significant financial risks if market conditions deteriorate.

Has Bitcoin adoption benefited El Salvador? While Bitcoin adoption has boosted tourism and innovation, its broader economic impact remains a subject of debate.

What is Bitcoin City? Bitcoin City is a proposed development funded by Bitcoin bonds, featuring crypto-friendly infrastructure and zero capital gains taxes.

Conclusion

El Salvador’s plan to expand its Bitcoin reserves reaffirms its belief in cryptocurrency as a transformative economic tool. While the move aligns with its long-term vision, it also highlights the delicate balancing act required to navigate global financial dynamics and domestic expectations.

As the country charts its course, the world will closely watch how this bold experiment unfolds.

To learn more about the innovative startups shaping the future of the crypto industry, explore our article on latest news, where we delve into the most promising ventures and their potential to disrupt traditional industries.

El Salvador has increased its national crypto reserve, adding 11 Bitcoin worth over $1 million. The latest purchase puts the country’s entire Bitcoin cache at 5,980 BTC. The recent purchase is also after the country’s fresh $1.4 billion loan from the International Monetary Fund (IMF). The loan, however, didn’t come without promises of the country relaxing some of its crypto policies.

One such policy concerns its national crypto wallet, Chivo. The country has agreed to discontinue or sell its national digital wallet. Meanwhile, El Salvador has been making huge profits with its Bitcoin reserve. The recent portfolio tracker by its president, Nayib Bukele, showed an unrealized profit of over $125 million. The figure represents a 91% growth, with most of the profits coming from the purchases made during the bear market.

El Salvador remains committed to purchasing BTC

According to previous reports, the IMF agreement was expected to stifle the country‘s Bitcoin quest, but that looks unlikely now. In its agreement, El Salvador had clarified its intention to keep purchasing BTC. According to the country’s national Bitcoin office director Stacy Herbert on microblogging platform X, Bitcoin will remain a legal tender in El Salvador and the country will keep increasing its BTC reserve.

However, a statement from New Jersey-based MoneyCorp’s head of trading and structured products for North America Eugene Epstein felt the announcement was a PR stunt. He mentioned that the announcement might be a way to soften the backlash, but with the country still purchasing, it shows they have adopted Bitcoin as a way of life.

IMF loan rules and its Bitcoin dissatisfaction

There was a lot of speculation and raised eyebrows when reports said the IMF and El Salvador were getting into a loan agreement. This is because the organization had always been opposed to their Bitcoin push, sounding a note of alarm for investors. However, El Salvador only agreed to amend some of its policies. Its recent purchase also shows its strong commitment to Bitcoin.

Most skeptics are always worried about the risks that come with holding BTC, noting that it is a huge gamble for governments to hold the asset. Even when El Salvador announced the asset as a legal tender, negative comments were trailing the decision, especially when several reports noted that most of its residents were not gravitating toward the decree. However, crypto enthusiasts have always drummed up the need to adopt the asset, claiming that users stand to gain more when they do.

The post El Salvador buys 11 Bitcoin as it increases its crypto reserves first appeared on Coinfea.

El Salvador has made a bold move by purchasing $1 million worth of Bitcoin just a day after finalizing a $1.4 billion deal with the International Monetary Fund (IMF), which imposes new restrictions on the country’s involvement with cryptocurrency. On December 19, the National Bitcoin Office confirmed that 11 BTC were added to the country’s strategic reserve, taking El Salvador’s total holdings to 5,980.77 BTC, valued at approximately $580 million, based on Bitcoin’s price of $97,000 at the time.

This purchase marks a break from the country’s previously stated plan to buy “one Bitcoin per day,” which was announced by President Nayib Bukele in November 2022. However, National Bitcoin Office Director Stacy Herbert assured in an X post that the country would continue to buy Bitcoin, possibly at an accelerated pace in the future.

IMF Deal Imposes Limits

On December 18, El Salvador struck a landmark agreement with the IMF, securing a $1.4 billion financing deal to be disbursed over the next 40 months. However, this agreement comes with a significant caveat: the IMF has urged El Salvador to limit its Bitcoin dealings.

The IMF’s mandate includes restricting government-led Bitcoin activities, limiting Bitcoin transactions and purchases, and halting the use of Bitcoin for tax payments, which will continue to be collected in US dollars. Additionally, the IMF has required that the government unwind its involvement in the Chivo Wallet, a crypto wallet launched by the Salvadoran government for Bitcoin transactions.

In response to the IMF’s stipulations, a spokesperson for the National Bitcoin Office stated that despite these new conditions, Bitcoin would remain central to the country’s strategy. While the government will scale back its involvement in Bitcoin transactions, it will continue purchasing Bitcoin, with the possibility of increasing the pace of acquisitions.

Bitcoin Status Remains Unchanged

Despite the IMF’s pressure, El Salvador remains steadfast in its commitment to Bitcoin as legal tender. The country made history in September 2021 by becoming the first nation to adopt Bitcoin alongside the US dollar as an official currency. Herbert confirmed that Bitcoin would retain its legal tender status in the country, though the Chivo wallet would be sold or wound down. The private sector, she added, would continue to facilitate Bitcoin transactions.

The deal with the IMF is still pending approval by the IMF Executive Board, marking the culmination of over four years of negotiation. The deal’s approval will likely bring an end to the tension caused by Bukele’s Bitcoin policies, which the IMF had warned could expose El Salvador to significant financial risks.

The post El Salvador Buys $1M Worth of Bitcoin After IMF Deal Restrictions appeared first on TheCoinrise.com.

El Salvador buys 11 Bitcoins, worth $1.07 million, highlighting its commitment to crypto.

The move follows a $1.4 funding deal with the IMF and a subsequent BTC dip below $100k.

Stacy Herbert assures that BTC will remain El Salvador’s legal tender, unhindered by the deal.

The International Monetary Fund’s (IMF) $1.4 billion deal could not rein in El Salvador’s Bitcoin ambitions! El Salvador doubles down on its unwavering commitment to crypto by adding 11 Bitcoins to its reserves. This move comes amid a Bitcoin price slump and speculation that the IMF deal would prompt El Salvador to reconsider its Bitcoin strategy.

We just transferred over a million dollars worth of Bitcoin to our Strategic Bitcoin Reserve. pic.twitter.com/4ZrxGw9Od0

— The Bitcoin Office (@bitcoinofficesv) December 20, 2024

In the early hours of December 20, the Bitcoin Office of El Salvador announced the Central American country’s latest BTC purchase. The country bought 11 Bitcoins for around $1.07 million. Currently, the country holds a total of 5,980.77 BTC, worth $579,745,611.

In a recent development, El Salvador entered into a strategic deal with the IMF, agreeing to ease the country’s controversial Bitcoin policies. If approved, the agreement would provide the country’s businesses the right to choose whether to accept Bitcoin as payment. In addition, the proposal also urges the government to reduce its involvement in the Chivo crypto wallet.

Market’s Sharp Reaction to Jerome Powell’s FOMC Speech

The concerns over the potential Bitcoin policy changes in El Salvador, along with Fed Chair Jerome Powell’s comments on crypto, triggered a market correction. Bitcoin, which traded above the significant $100k level, plunged to $96,886 as of press time. Over the last 24 hours, the coin experienced a decline of 4.23% despite a monthly hike of 4.77%.

Meanwhile, Stacy Herbert, director of the National Bitcoin Office, confirmed that Bitcoin would remain the legal tender despite the funding deal. She added that the country would continue purchasing Bitcoin to expand its strategic Bitcoin reserve.

EL SALVADOR SECURES $3.5 FUNDING DEAL

Bitcoin remains legal tender
El Salvador will continue buying bitcoin (at possibly an accelerated pace) for its Strategic Bitcoin Reserve
Bitcoin capital markets will continue to be built; for example, the recent tokenized issuance…

— Stacy Herbert (@stacyherbert) December 19, 2024

While the IMF deal sparked anxiety, Herbert assured El Salvador would not abandon its crucial Bitcoin projects. The country would further boost its Bitcoin capital markets and build Bitcoin policy and roadmaps. The funding scheme would not impact El Salvador’s Bitcoin education initiatives, such as the Mi Primer Bitcoin and Node Nation syllabus in schools. While the government-backed Chivo wallet will be sold, numerous private-sector Bitcoin wallets will still be available for use in El Salvador.

The post El Salvador Purchases 11 Bitcoins Despite $1.4B IMF Deal appeared first on CryptoTale.

IMF urges El Salvador to scale back Bitcoin use under $1.4B loan agreement.

El Salvador balances Bitcoin adoption with fiscal reforms to boost financial health.

Global crypto volatility pressures El Salvador’s cautious approach to Bitcoin strategy.

The International Monetary Fund (IMF) maintained its distance when asked about U.S. Bitcoin policies. IMF Spokesperson Julie Kozack declined to discuss President-elect Trump’s proposed U.S. Strategic Bitcoin Reserve.

Kozack stated the IMF will review such policies once they take effect. The organization has now struck a $1.4 billion loan agreement with El Salvador, the first country to make Bitcoin legal tender. This deal requires the nation to modify its Bitcoin strategy.

El Salvador’s IMF Agreement Modifies Bitcoin Implementation

The $1.4 billion IMF loan mandates El Salvador to limit its Bitcoin initiatives. The IMF asked the country to make cryptocurrency use optional for private businesses, which reduced previous disagreements. These changes support broader financial reforms to improve the country’s debt-to-GDP ratio and economic stability.

El Salvador will also reduce operations of its Chivo wallet…

The post El Salvador Trades Bitcoin Freedom for $1.4B IMF Lifeline appeared first on Coin Edition.

IMF Loan Deal Highlights El Salvador has finalized a $1.4 billion loan agreement with the International Monetary Fund (IMF) to strengthen its fiscal stability and drive inclusive economic growth. Pending IMF Executive Board approval, this deal also opens the door to additional financial backing from the World Bank and regional development banks, potentially raising the …

Continue reading "El Salvador Cuts Bitcoin Policies Amid $1.4 Billion IMF Loan"

The post El Salvador Cuts Bitcoin Policies Amid $1.4 Billion IMF Loan appeared first on Cryptoknowmics-Crypto News and Media Platform.

The current trade price of Bitcoin is $95,427 & this price level is 7% down over the last 24 hours period.

The current trade price of Bitcoin is $95,427 pic.twitter.com/jiks0CWxqO

— Bitcoinik (@Bitcoinikdotcom) December 20, 2024

Notably, today the highest & lowest trade price of Bitcoin was $102,877 & $92,290, which means Bitcoin saw more than -10%+ dumps in only 24 hours.

A crypto analyst shared his analysis-based opinion & said that the latest correction in Bitcoin price is very usual and it happens in every bull run.

#Bitcoin Staying on Course 💥Corrections are part of every #BTC bull run.Not convinced? Look back at how brutal corrections were in past cycles.The bull market is not over. 🚀 pic.twitter.com/wlINJiAcjg

— Titan of Crypto (@Washigorira) December 20, 2024

In the same time period, Ethereum crashed nearly 15%, which is a significant dump for this second top-ranked Cryptocurrency, amid the bull run in the Crypto sector.

The current trade price of Ethereum is $3,296 pic.twitter.com/Cs2mUWaKRR

— Bitcoinik (@Bitcoinikdotcom) December 20, 2024

Already Yesterday, we reported that panic among the Bitcoin traders came into play because of a non-Bitcoin-friendly loan deal between a Bitcoin bull country El Salvador & International Monetary Fund (IMF).

Here is the reason behind this price downfall https://t.co/qwa6Z4wiyQBad news for Bitcoin! El Salvador decides to limit the use of Bitcoin at government level

— Bitcoinik (@Bitcoinikdotcom) December 19, 2024

Notably, the El Salvador government purchased $1 million worth of Bitcoins today, despite being in a loan deal with the IMF body.

🇸🇻Just one day after the IMF agreed to a $3.3b loan in return for making Bitcoin acceptance voluntary, El Salvador buys $1m Bitcoin, more than 10x their usual 1 $BTC per day purchase.I guess the IMF won… 😅 pic.twitter.com/fCqYJLl5d2

— Bitcoin Archive (@BTC_Archive) December 20, 2024

Christmas Eve & New Year

The start of this week with the Bitcoin dump hinted that a big rally in the trade price of Bitcoin has been planned just before Christmas.Some crypto trading experts claim that it is a good sign that Bitcoin will show strong pump momentum this month, especially on the occasion of Christmas Eve.

Also, we know that the new year heading & the past several years are proof that January always comes with a bull momentum for Bitcoin. It is expected that at least a 20% pump in the trade price of Bitcoin will take place.

More capital inflow in Bitcoin & Ethereum market

Today, the United States Securities and Exchange Commission (SEC) approved the first spot Bitcoin and Ethereum combo ETFs from Hashdex and Franklin Templeton.

JUST IN: 🇺🇸 SEC approves Hashdex Nasdaq #Bitcoin & Ethereum ETF. pic.twitter.com/ewrfRHVsMk

— Bitcoin Archive (@BTC_Archive) December 19, 2024

It means investors will get exposure to Ethereum & Bitcoin simultaneously with a single ETF product.

Read also: Top big companies buy $2 billion Bitcoin but still price crashes: Here is the reason?

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.

The post El Salvador Adds $1M in Bitcoin to Reserves Following $1.4B IMF Agreement appeared first on Crypto News Land.

El Salvador added $1 million worth of Bitcoin in a single day — only a day after striking a $1.4 billion deal with the International Monetary Fund that stipulated limits on dealing with the cryptocurrency.

The country’s National Bitcoin Office wrote in a Dec. 19 X post that it had “transferred over a million dollars worth of Bitcoin to our Strategic Bitcoin Reserve,” with its website showing it added 11 Bitcoin (BTC) to its holdings.

The move breaks its long-running streak of adding “one Bitcoin per day,” which President Nayib Bukele announced in November 2022 and brings the country’s holdings to 5,980.77 BTC, worth around $580 million, with BTC trading at around $97,000.

National Bitcoin Office director Stacy Herbert said in a Dec. 19 X post that El Salvador “will continue buying Bitcoin (at possibly an accelerated pace).”

On Dec. 18, Bukele’s government struck a financing agreement with the IMF, which asked the country’s government to wind down some of its Bitcoin dealings to receive $1.4 billion from the global lender over the next 40 months. 

The IMF said that, as part of the deal, El Salvador’s government-led Bitcoin activity, transactions, and purchases would “be confined.”

The country also agreed to make private sector acceptance of Bitcoin voluntary, allow for taxes only to be paid in US dollars and unwind its government’s involvement in its Chivo crypto wallet.

A Bitcoin Office spokesperson told Cointelegraph at the time that it “will keep buying one Bitcoin a day (likely even more in the future), and we will not sell any of our current holdings” and added that “Bitcoin continues to be our main strategy.”

El Salvador was the first country to make Bitcoin a legal tender in September 2021, and Herbert said that the policy would remain unchanged.

Source: Stacy Herbert

She added the government-issued Chivo wallet “will be sold or wound down” and expected private sector Bitcoin wallets would “continue serving El Salvador.”

The IMF Executive Board still needs to approve the deal with the country, which would mark the end of four years of negotiations strained by Bukele’s Bitcoin policies, which the IMF said put the country at risk.

Big Questions: How can Bitcoin payments stage a comeback? 

El Salvador has ramped up its Bitcoin buying a day after agreeing to an International Monetary Fund deal that required scaling back its government-led crypto activities.

On Dec. 19, the first nation to adopt Bitcoin as a legal tender and host a Bitcoin strategic reserve added 11 BTC worth over $1 million to its holdings. With the recent purchase, the country’s total holdings now stand at over 5,980 Bitcoin, currently valued at over $577 million according to the National Bitcoin Office’s tracker.

Up until now, El Salvador’s Bitcoin accumulation followed the steady pace of its “1 Bitcoin a day” program, launched by President Nayib Bukele after making the cryptocurrency legal tender in 2022.

However, the latest purchase deviated from the strategy and aligns with the National Bitcoin Office’s plans to continue buying Bitcoin at an “accelerated pace,” as confirmed by the Bitcoin office’s director, Stacy Herbert, on Dec. 19.

This follows the country’s recent yet-to-be-confirmed $1.4 billion IMF deal, which mandates changes to its Bitcoin policy. The global regulator has repeatedly warned of the economic risks Bitcoin adoption could pose to the nation’s financial stability.

You might also like: El Salvador to discontinue Bitcoin wallet Chivo in $1.4b IMF deal

As part of the deal, El Salvador has agreed to remove mandatory requirements for businesses to accept Bitcoin, making it optional, and to restrict tax payments to US dollars. Further, the country will also wind down the Chivo crypto wallet, which was launched in 2021 as the nation’s state-backed platform to facilitate Bitcoin transactions.

Nevertheless, according to Herbert, the country will continue to accept Bitcoin as legal tender and expand its efforts to solidify its position as a Bitcoin-focused economy. This includes advancing Bitcoin capital markets, fostering education programs, and supporting private-sector Bitcoin wallets to serve the growing ecosystem.

Additionally, initiatives like blockchain developer training and financial literacy programs will remain central to El Salvador’s Bitcoin strategy as governments worldwide grow increasingly curious about Bitcoin, spurred by incoming US President Donald Trump’s plan to establish a strategic Bitcoin reserve.

Notably, regulators in Brazil have proposed allocating 5% of the nation’s $370 billion treasury to a Bitcoin strategic reserve. Elsewhere, a deputy in the Russian parliament has urged Finance Minister Anton Siluanov to consider a similar approach.

Last month, Polish minister Sławomir Mentzen also pitched the idea of Poland holding Bitcoin in a bid to make the country more crypto-friendly.

Read more: Bitget secures Bitcoin service provider license in El Salvador