The IMF is seeking to tighten restrictions on the purchase of Bitcoin by the public sector in El Salvador

ChainCatcher news, according to Cointelegraph, the International Monetary Fund (IMF) is seeking to tighten restrictions on public sector purchases of Bitcoin in El Salvador as part of a $1.4 billion delayed financing arrangement with the country. On March 3, the IMF submitted new requirements for an extended fund arrangement to El Salvador, including a technical memorandum that explicitly states the condition that "the public sector of El Salvador shall not voluntarily accumulate Bitcoin."

The memorandum also requires restrictions on the public sector issuing "any type of debt or tokenized instruments linked to or denominated in Bitcoin that constitutes a liability for the public sector." El Salvador's Executive Director Méndez Bertolo emphasized in a statement on February 26 that the IMF's extended fund mechanism aims to "improve governance, transparency, and resilience, boosting confidence and national growth potential."

Bertolo stated, "At the same time, the risks associated with Bitcoin are being mitigated. Authorities have revised the Bitcoin law to clarify the legal nature of Bitcoin and removed the essential characteristics of legal tender. Acceptance of Bitcoin will be voluntary, taxes will be paid in U.S. dollars, and the public sector's role in Bitcoin projects will be limited." The plan is expected to attract "significant additional financial support" from the World Bank, the Inter-American Development Bank, and other regional development banks.