The government of El Salvador agreed to scale back its involvement in Bitcoin to secure a $1.4 billion loan from the International Monetary Fund.
Background of IMF Deal
El Salvador has reached an agreement with the IMF, under which the country agreed to modify its Bitcoin policies. This decision will help El Salvador secure an additional $3.5 billion from the World Bank and regional banks.
Bitcoin Policy Changes
Under the new terms, Bitcoin will be optional for merchants, and related activities in the public sector will be limited. Additionally, the government will reduce its involvement in the Chivo wallet.
Impact on the Economy
These changes will reverse President Nayib Bukele's 2021 initiative and may affect the role of Bitcoin in the country's economy, raising questions about its significance in national economies.
The reduction in Bitcoin usage in El Salvador could have a significant impact on the economy, while securing crucial financial support from international organizations.
