El Salvador Amends Bitcoin Laws to Seal $1.4B IMF Deal
El Salvador has changed its laws on Bitcoin to meet preconditions for a deal for a $1.4 billion loan agreement it reached with the International Monetary Fund. The Congress in the Central American country hastily passed changes to laws, in a partial retreat from its Bitcoin adoption strategy, though the cryptocurrency remains legal tender.
Key Changes in Bitcoin Law
The updated law did not require any businesses to accept Bitcoin in exchange for goods or services; now it is fully optional. The updated law went further to require all tax payments in U.S. dollars, which would limit Bitcoin’s application in government transactions. The government also toned down government-driven crypto initiatives, like the Chivo wallet launched to boost the usage of Bitcoin.
Meanwhile, the government is still supportive of Bitcoin despite all changes. According to the National Bitcoin Office, El Salvador currently holds 6,049 BTC, or around $633 million, at an unrealized profit of 127%.
El Salvador Speeds Up Bitcoin Accumulation
El Salvador increased the rate of purchasing Bitcoin after striking a deal with the IMF. The country is now buying more than just “1 Bitcoin a day”, once purchased 11 BTC worth more than $1 million in a single day and then bought 12 more on January 21.
Head of the National Bitcoin Office, Stacy Herbert reiterated that El Salvador was poised to purchase more Bitcoins and at a quicker pace.
Current Crypto Initiatives and Future Plans
Since El Salvador became the first country to declare Bitcoin legal tender in 2021, it has embarked on several projects to incorporate crypto into its economy. More than 200 Bitcoin ATMs have been installed, making the country a Bitcoin-friendly jurisdiction.
Other key projects include the Volcano Energy, a Bitcoin mining project with renewable energy sources, and the Volcano Bonds, which finance infrastructure development and the proposed Bitcoin City—a geothermal-powered tax-free crypto hub.
Notably adding to its crypto-friendly environment, the Tether Group recently announced its plans to operate in El Salvador after securing a Digital Asset Service Provider license through its affiliate Bitfinex Derivatives.
These moves reflect El Salvador’s strategic balance between fostering Bitcoin adoption and meeting IMF-backed financial reforms.
