El Salvador is making some changes to its Bitcoin policies as part of a deal with the International Monetary Fund (IMF). The Central American country has secured a $1.4 billion loan after nearly four years of negotiations. To finalize the agreement, El Salvador adjusted some of its earlier approaches to Bitcoin, signaling a shift in how the country balances its adoption of the cryptocurrency with global financial expectations.
Businesses Can Choose Bitcoin
One of the key updates is that businesses in El Salvador will no longer be required to accept Bitcoin as a payment method. Previously, businesses had to accept Bitcoin, which caused some confusion and pushback, especially for those who preferred to stick with traditional payment systems. Now, the decision to accept Bitcoin is left to the business owner.
At the same time, the government will only collect taxes in U.S. dollars moving forward. For context, El Salvador uses the U.S. dollar as its official currency alongside Bitcoin, but this new rule simplifies tax payments for everyone involved. The IMF supports these updates, seeing them as steps that could strengthen El Salvador’s financial foundation.
Chivo Wallet Steps Back
El Salvador is also reducing its involvement with the Chivo wallet, the country’s official Bitcoin app. If you’re not familiar, the Chivo wallet launched in 2021 and came with a $30 Bitcoin bonus for new users to encourage adoption. While it was popular initially, fewer people seem to use it now. The government plans to gradually phase out its role in managing the app.
But don’t think El Salvador is stepping away from Bitcoin entirely. The National Bitcoin Office, which oversees the country’s Bitcoin initiatives, says the government will continue its plan to buy one Bitcoin every day. This approach started in November 2022 when President Nayib Bukele announced it as part of El Salvador’s long-term Bitcoin strategy.
Bitcoin Holdings Show Progress
El Salvador’s Bitcoin journey hasn’t been without its ups and downs, but the numbers show some progress. The country now holds over 5,980 Bitcoin according to the Bitcoin Office, and President Bukele recently shared that these holdings have an unrealized profit of $362 million. That means if they sold their Bitcoin at current prices, they’d make that much in profit. However, the government isn’t planning to sell anytime soon. Bukele says the daily Bitcoin purchases will continue until Bitcoin becomes too expensive to buy with traditional currency.
Just this week, El Salvador bought for another $1 million worth of Bitcoin.
Finding Balance
The agreement with the IMF shows how El Salvador is balancing its Bitcoin ambitions with global financial standards. The country remains committed to using Bitcoin, but the recent updates make its approach more flexible and practical. Interestingly, even the IMF, which isn’t known for being a fan of Bitcoin, has indirectly highlighted some of its strengths—like its accessibility and neutrality—through this deal.
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