Nikolas Sargeant
El Salvador has struck a deal with the International Monetary Fund (IMF) to limit its bitcoin-related activities in exchange for a $1.4 billion loan. The agreement aims to address the country’s macroeconomic challenges and balance of payments needs, extending over a 40-month period.
Key provisions of the deal include restricting public sector bitcoin purchases, curbing bitcoin transactions, and winding down the government’s Chivo wallet, which was launched to promote bitcoin adoption. The IMF also mandated that El Salvador only accept taxes in U.S. dollars and make the use of Bitcoin voluntary in the private sector—contradicting the country’s 2021 Bitcoin Law, which required businesses to accept Bitcoin as payment.
The IMF package, part of a broader $3.5 billion financing initiative with support from other development banks, aims to strengthen fiscal stability, improve transparency, and reduce public debt. Although the deal is not yet finalized, approval is contingent on the country’s implementation of the agreed measures.
