El Salvador Amends Bitcoin Law to Appease IMF and Attract $1.4B Loan

The Legislative Assembly in El Salvador has approved amendments to the country's Bitcoin law to align it with a deal I struck with the International Monetary Fund (IMF) for a $1.4 billion agreement.

El Salvador has amended its Bitcoin law to comply with an agreement reached with the International Monetary Fund (IMF) for a $1.4 billion loan.

The amendments were passed swiftly by the Legislative Assembly after being submitted by President Nayib Bukele, who is known for his pro-crypto stance. Most members of Congress from the President’s New Ideas Party voted in favor of the new Bitcoin law, which passed with 55 votes in favor and only two opposing.

The new law makes accepting Bitcoin as a form of payment optional for businesses, easing pressure from private sector participants who prefer a more voluntary approach.

The IMF’s involvement in the law is part of its efforts to stabilize the country’s economy by providing a $1.4 billion loan to address urgent financial reforms. The IMF aims to support substantial reforms to enhance the country’s economic framework over three years.

While most adjustments focus on strengthening consumer protection measures, the IMF also intends to introduce clear regulations for using Bitcoin.

El Salvador made history in 2021 by becoming the first country to adopt Bitcoin as legal tender, aiming to improve citizens’ access to finances.

Despite global fanfare for the initiative, it quickly faced challenges, prompting President Bukele to admit that adoption rates were lower than expected. The newly passed Bitcoin law reflects a shift toward adopting frameworks that combine stable economic practices and innovation.

During the peak of the bull run, Bukele and his administration adhered to the government’s plan and continued a “buy one Bitcoin a day” strategy that contributed to building the country’s Bitcoin Federal Reserve.

The country now holds at least 6,049 Bitcoins, valued at over $634.44 million. Having acquired their BTC stash at an average price of $46,000 per Bitcoin, the country’s portfolio has generated a 129% profit.

The Salvadoran government navigates a delicate balance between adhering to traditional financial norms and embracing the new cryptocurrency ecosystem.

According to experts, the adjustments outlined in the new Bitcoin law will create a perfect synergy between BTC’s innovative aspects and the maintenance of economic stability.

The IMF-led evaluations will continue and might further influence future decisions on crypto regulation.