El Salvador may scale back its Bitcoin plan to reach a $1.3 billion agreement with the IMF

El Salvador is planning to adjust its Bitcoin policy in exchange for a $1.3 billion loan from the International Monetary Fund (IMF). According to the draft agreement, El Salvador will eliminate the mandatory requirement for businesses to accept Bitcoin payments, switching to voluntary acceptance, while committing to reduce the fiscal deficit by 3.5 percentage points over three years through spending cuts and tax increases. Additionally, El Salvador will enhance its foreign exchange reserves to $15 billion through anti-corruption legislation. If negotiations between the IMF and El Salvador are successful, the country will secure an additional $2 billion loan from the World Bank and the Inter-American Development Bank, helping El Salvador reintegrate into the international financial market. Despite President Bukele facing controversy for advancing Bitcoin policy, El Salvador's bond prices have significantly risen recently, with its risk premium dropping from 3,500 basis points in July 2022 to 398 basis points recently. The Bukele administration is seeking to promote national development through economic recovery and foreign investment while continuing to push its signature Bitcoin policy. Although many Salvadorans still prefer to use the US dollar, Bukele has stated that the country's Bitcoin reserves have appreciated to over $600 million, a 127% increase, describing it as "El Salvador's first Bitcoin piggy bank."