El Salvador eases Bitcoin rules in $1.4 billion IMF loan deal
Despite these developments, public adoption of Bitcoin in El Salvador remains low, with over 90% of Salvadorans not using it for transactions.
El Salvador has agreed to make Bitcoin acceptance voluntary for companies and limit public sector involvement in Bitcoin-related activities as part of a $1.4 billion loan deal with the International Monetary Fund (IMF). The agreement aims to reduce the country’s debt-to-GDP ratio, with the IMF highlighting that these measures will minimise risks associated with the Bitcoin project.
The government will also scale back its involvement with the Chivo wallet, the state-backed application launched to promote Bitcoin adoption, and taxes will continue to be paid in US dollars. Despite these reforms, the National Bitcoin Office confirmed El Salvador’s dedication to Bitcoin, stating that it will keep accumulating the cryptocurrency and maintain its strategy of daily Bitcoin purchases.
The loan deal, which awaits IMF Executive Board approval, ends years of negotiation that began after President Nayib Bukele made Bitcoin legal tender in 2021. While the IMF has criticised cryptocurrency’s volatility, Bukele’s advisers have dismissed the agreement’s restrictions as insubstantial. Meanwhile, surveys show limited adoption, with over 90% of Salvadorans not using Bitcoin for transactions.
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