El Salvador Modifies the Status of Bitcoin: It Is No Longer Legal Tender
The government of El Salvador has officially announced that bitcoin will cease to be legal tender in the country. From now on, its use will be completely optional and it will no longer be possible to require its acceptance for the payment of goods and services.
El Salvador made history in September 2021 by becoming the first country to adopt bitcoin as official currency. However, less than four years later, this policy has been reversed. In December 2024, as part of an agreement with the International Monetary Fund (IMF) to access a loan of approximately $1.4 billion, the government led by Nayib Bukele implemented a series of changes in the regulation of the cryptocurrency:
Bitcoin ceased to be legal tender, becoming an optional payment method.
The obligation for businesses to accept payments in bitcoin was eliminated.
The government decided to sell or discontinue the use of the Chivo digital wallet, used for bitcoin transactions.
These modifications respond to IMF concerns about the volatility of bitcoin and its possible impact on the economic stability of the country. Despite these adjustments, El Salvador continues to maintain bitcoin reserves and the government continues to bet on the cryptocurrency, albeit with a more moderate approach and without the official promotion it had in the past.
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