El Salvador introduced reforms to reforms using Bitcoin in his financial and industrial sectors. Central American countries have reached an agreement with the International Monetary Fund (IMF) to obtain a loan of US$1.4 billion (approximately Rs 1,213 crore). As part of the agreement between the International Monetary Fund and El Salvador, the government will restrict its participation with the world’s most widely used cryptocurrency. To keep pace with the IMF’s situation, El Salvador has voluntarily paid BTC payments for local merchants in the private sector. A Reuters report said the decision was approved and finalized by the country’s legislature earlier this week.
Councilman Elisa Rosales this week extended the amendment to the Legislative Assembly for voting procedures. The reform has only two votes, while 55 lawmakers voted to end it. Rosales said the move will promote and ensure actual utilization of crypto assets, which will subsequently strengthen its permanence as fiat currency.
El Salvador is eager to get crypto reforms to get IMF loans
The transaction between El Salvador and the International Monetary Fund was finalized in December 2024. Over the next 40 months, the IMF will provide the country with US$1.4 billion (approximately Rs 1,213 crore) in loans to help stabilize the country’s economy. The IMF said at the time: “The IMF’s El Salvador authorities and a team of employees have reached an employee-level agreement on a 40-month expansion arrangement to meet the balance of payment needs and support the government’s economic reforms. Potential risks of Bitcoin projects It will be greatly reduced, which is consistent with fund policies. Legal reforms will allow the private sector to voluntarily accept Bitcoin.”
As part of the agreement, El Salvador will also “restrict” its public sector exposure to BTC-related activities. According to the International Monetary Fund’s instructions, the country must accept taxes only in the form of US dollars, not BTC. In addition, the country is also asked to gradually relax its participation in promoting participation in its crypto wallet “chivo”.
The IMF has retained financial aid to El Salvador since late April 2024, and the IMF has asked the country to narrow the scope of its Bitcoin legislation and limit public exposure to this volatile asset.
Although El Salvador has aroused the IMF’s anger due to its crypto-friendly policy, it has also managed to attract Web3 companies to establish its offices in the country. Tether said it will move its headquarters to El Salvador. Similarly, Jack Dorsey-backed Bitcoin Miner Ocean moved its headquarters there last year.
