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The authorities of El Salvador and the International Monetary Fund (IMF) are close to an agreement valued at $1.3 billion dollars. As expected, access to these funds comes with conditions from the monetary body. In this way, the Salvadoran authorities should make changes to the so-called Bitcoin Law.
According to a recent Financial Times report, the authorities of the Central American country would have to adapt to the new conditions. Despite this, these IMF demands do not seem major and are limited (according to the aforementioned media) to making the scope of the aforementioned law more flexible.
Since El Salvador adopted Bitcoin in 2021 as legal tender, the token’s status is equated to that of the US dollar. In that sense, authorities are forcing merchants to accept the digital currency in their payment mechanisms. According to reports, the IMF requests that this measure become voluntary.
The fact that El Salvador accepts these conditions reflects a victory for the country. The latter is due to the fact that initially the IMF requested that the Bitcoin Law be repealed in its entirety. Now, the organization limits itself to asking that the intensity with merchants be lowered. Likewise, they request greater surveillance and transparency. Consequently, none of this threatens that nation’s government’s plans regarding the major Cryptocurrency.
El Salvador’s Bitcoin Law will experience slight changes
For the Spanish-speaking nation, access to international credit becomes a decision for financial survival. This is because the country has limited sources of access to international capital. Thus, some non-fundamental changes in exchange for access to credit could be considered a more than acceptable agreement.
It should be noted that access to the $1.3 billion from the IMF is added to other amounts from the World Bank and the Inter-American Development Bank. In total, the country would have access to approximately $3.3 billion dollars in credits from these financial organizations.
So far, the IMF’s stance seems remarkably soft, considering the hostility of previous years. Even the contact channels between the organization and El Salvador were considerably reduced at the time. As already mentioned, in 2022, the IMF asked the country to revoke Bitcoin’s legal tender status. That sparked annoyance among the Salvadoran authorities, but in the end it seems that both reached an understanding.
With the recent rally in the price of BTC, El Salvador’s investments in the currency amount to approximately $600 million. For its part, this successful purchasing program contrasts with the slow adoption within the nation. So far, expectations of mass adoption of cryptocurrency with government stimulus have not been met.
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