El Salvador has signed an agreement with the International Monetary Fund to make Bitcoin acceptance voluntary and limit its use in the public sector.
IMF Agreement
El Salvador will receive $1.4 billion from the IMF over 40 months, aimed at reducing the country's debt-to-GDP ratio. The agreement aims to mitigate risks associated with Bitcoin use.
Changes in Bitcoin Policy
New laws will make Bitcoin acceptance by the private sector voluntary. For the public sector, economic activities involving Bitcoin will be confined. The country will phase out its involvement in the state-backed Chivo wallet and taxes will only be paid in US dollars.
Reactions and Consequences
The IMF agreement awaits approval from the Fund's Executive Board. President Nayib Bukele previously promoted Bitcoin as legal tender, stirring controversy. Reactions vary, with some experts and officials deeming the agreement inconsequential.
The agreement with the IMF marks a significant shift in El Salvador's economic policy regarding Bitcoin, aimed at alleviating debt burdens and refining its cryptocurrency initiatives.
