In summary
- El Salvador reached an agreement with the IMF that limits the scope of its Bitcoin law but allows it to continue accumulating BTC.
- As part of the agreement, the use of Bitcoin will be voluntary for the private sector, and the public sector will reduce its crypto participation.
- The country plans to phase out the state-owned Chivo wallet while maintaining a strategic reserve of over 5,900 BTC.
El Salvador may have reached an agreement with the International Monetary Fund that will see the small country reduce the scope of its Bitcoin law, but will remain in “HODL.” And it could even increase your BTC purchases.
This was stated by Stacy Herbert, director of El Salvador’s National Bitcoin Office, who wrote on X (formerly known as Twitter) on Thursday that the country could even continue purchasing the Cryptocurrency at an “accelerated pace” from now on.
In 2021, El Salvador made Bitcoin legal tender alongside the US dollar. The new law meant that companies had to accept cryptocurrency if they had the technological means to do so.
The IMF criticized the measure repeatedly. Despite this, El Salvador has maintained conversations for years with the institution to obtain a loan to boost the country’s economic growth. As a consequence of these negotiations, the country will have to modify some of its policies related to Bitcoin.
On Wednesday, the country reached a $1.4 billion loan agreement with the IMF—and as part of the agreement, it must make Bitcoin voluntary for the private sector while restricting public sector participation in crypto ecosystem activities.
Herbert wrote in
El Salvador’s millennial president Nayib Bukele, who created the Bitcoin law, has frequently purchased Bitcoin to hold it as a reserve asset, and has at times displayed the country’s holdings on social media amid its recent price spike.
Data from SpotOnChain shows that the official government wallet holds more than 5,900 BTC, currently valued at $579.4 million.
Herbert further wrote that the government would sell or phase out its government-sponsored wallet, Chivo. Authorities gave citizens $30 of free Bitcoin using the app in 2021.
Polls have shown that President Bukele is very popular among Salvadorans, in part thanks to a tough crackdown on crime, but citizens have remained largely indifferent to Bitcoin.
Edited by Andrew Hayward
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