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El Salvador Loosens Bitcoin Rules Amid IMF Agreement

El Salvador, one of the first nations to legalize Bitcoin, has moved to amend its cryptocurrency laws in response to international financial pressures. According to a recent Reuters report, the country’s congress swiftly approved new legislation that makes the acceptance of Bitcoin voluntary rather than mandatory, aligning with the requirements of a major international lender.

In December 2024, El Salvador secured a $1.4 billion loan agreement with the International Monetary Fund (IMF). As part of the conditions, the IMF requested that the government reduce its direct involvement with Bitcoin, allowing merchants in the private sector to decide whether to accept it as payment.

The legislation passed with overwhelming support—55 votes in favor and only two against. Before this amendment, businesses were legally required to accept Bitcoin as a form of payment, a mandate that faced criticism both domestically and internationally. The new law provides businesses with the option to use Bitcoin at their discretion.

Elisa Rosales, a lawmaker from El Salvador’s ruling party, defended the amendment, stating that it was necessary to ensure Bitcoin’s “permanence as legal tender” while making its implementation more practical.

Despite the IMF’s request to reduce exposure to cryptocurrencies, El Salvador has continued adding to its Bitcoin reserves. On January 21, 2025, The Paypers reported that the country had purchased an additional 12 Bitcoins, bringing its total holdings to 6,049.18 BTC. Over the past seven days, El Salvador’s Bitcoin holdings increased by four BTC. As of the latest valuation, the country’s total Bitcoin assets were worth approximately $636,259,132.

The question remains: will El Salvador alter its Bitcoin investment strategy in the near future? Experts suggest that the IMF deal could influence the government’s approach to cryptocurrencies. However, El Salvador’s continued Bitcoin purchases indicate that its stance has not yet changed.

The decision to allocate national funds for acquiring more digital assets remains controversial. The cryptocurrency market is known for its extreme volatility, leading some analysts to argue that heavy investment in Bitcoin could be a risky financial strategy.

Since its inception, Bitcoin has experienced astronomical growth. According to data from CoinMarketCap, Bitcoin’s value has increased by 169,766,956.46% since its launch. At the time of writing, it was trading at $104,946, with a market capitalization of $2.08 trillion and a 24-hour trading volume of $52.18 billion.

Meanwhile, shifts in global political leadership, particularly in the United States, could further influence the adoption and regulation of cryptocurrencies. Some analysts believe that recent political changes may bolster support for Bitcoin and other digital assets, potentially shaping El Salvador’s long-term strategy.

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