El Salvador

El Salvador reaches a $1.4 billion loan agreement with the IMF, and Bitcoin payments will become voluntary

ChainCatcher news, according to Cointelegraph, El Salvador has reached a $1.4 billion loan agreement with the International Monetary Fund (IMF), planning to receive funding support over the next 40 months. As part of the agreement, the country will make it voluntary for merchants to accept Bitcoin payments, while gradually reducing the government's involvement in Bitcoin-related projects, including a phased withdrawal from the management of the state-supported wallet app Chivo.The IMF stated that this move will significantly reduce the potential risks associated with Bitcoin projects, while clearly stipulating that the public sector's participation is limited to specific activities within the Bitcoin economy. Additionally, taxes will be paid only in U.S. dollars, not in Bitcoin. The agreement still requires approval from the IMF's executive board, marking the end of a four-year negotiation with the IMF since El Salvador adopted Bitcoin as legal tender in June 2021. The IMF has previously warned that the speculative nature of Bitcoin could pose financial risks to the country. The agreement will also facilitate additional financing from institutions such as the World Bank, with total financing exceeding $3.5 billion.Nevertheless, El Salvador's presidential Bitcoin advisor Max Keiser expressed disdain on social media platform X, stating that the use of Bitcoin in the country "has never been so active and continues to grow." However, surveys show that 92% of Salvadorans have not used Bitcoin for transactions, an increase from 88% in 2023.
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