El Salvador makes Bitcoin acceptance optional for businesses
The government will also stop accepting Bitcoin for tax payments and plans to reduce its involvement in Bitcoin-related initiatives.
El Salvador’s Legislative Assembly has amended its Bitcoin Law, making it optional for businesses to accept Bitcoin as payment. The change comes as part of the conditions set by the International Monetary Fund (IMF) for a $1.4 billion loan aimed at strengthening the country’s economy.
In 2021, El Salvador became the first country to adopt Bitcoin as legal tender alongside the US dollar. However, the mandatory Bitcoin acceptance for businesses faced criticism due to the cryptocurrency’s volatility and the population’s limited understanding of digital currencies.
The recent reforms allow businesses to choose whether to accept Bitcoin, and the government will no longer accept Bitcoin for tax payments. This move aims to address concerns raised by the IMF about the potential risks to financial stability and consumer protection while still maintaining Bitcoin’s legal status in the country.
In response to these concerns, the government also plans to scale back its involvement in Bitcoin-related initiatives, including reducing the use of the Chivo Wallet app.
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