IMF Deal Forces El Salvador to Adjust Bitcoin Strategy
El Salvador has finalized a $1.4 billion loan agreement with the IMF, which requires scaling back its Bitcoin initiatives. Under the terms, Bitcoin acceptance will be voluntary for private businesses, and public sector involvement in crypto will be restricted.Reforms Aim to Address Economic Stability
The agreement includes broader reforms, such as anti-corruption measures and enhanced banking regulations, to stabilize the economy. El Salvador must reduce its debt-to-GDP ratio, currently at 85%, and improve financial governance.Bitcoin’s Role Reassessed
Since adopting Bitcoin as legal tender in 2021, the country has faced mixed reactions and limited long-term adoption of its Chivo wallet program. Taxes will remain payable in U.S. dollars.Looking Ahead
While the deal unlocks potential funding of up to $3.5 billion, critics highlight the diminishing role of Bitcoin in the country’s financial strategy.
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