El Salvador has entered into an IMF agreement worth $1.4 billion aimed at bolstering its economic stability, under which public sector Bitcoin purchases are halted.
Objectives of the IMF Arrangement
The IMF-supported program aims to strengthen El Salvador's fiscal and external sustainability, including ambitious fiscal consolidation plans and enhanced reserve buffers.
Impact on Bitcoin Adoption
Under the new agreement, El Salvador's public sector cannot acquire Bitcoin. However, the private sector's use of cryptocurrency remains voluntary: businesses and individuals may continue to use Bitcoin for transactions should they choose to do so.
Role of the Private Sector
The private sector in El Salvador remains free to make independent decisions regarding Bitcoin transactions, while the government is no longer involved in issuing debt or instruments linked to Bitcoin.
The IMF agreement provides El Salvador with the financial support needed for sustainable growth while restricting state involvement in Bitcoin assets.
