Bitcoin news: the International Monetary Fund (IMF) has introduced new conditions in its financing agreement with El Salvador. This initiative concerns the prohibition of “accumulation of Bitcoin” by the public sector of the country.
The IMF memorandum, part of the 1.4 billion dollar agreement, includes significant restrictions on Bitcoin purchases, marking an important step in the relations between the international organization and the Central American nation.
Summary
El Salvador: details of the agreement with the IMF for “the accumulation of Bitcoin”
On March 3, the IMF submitted a request to extend the financing agreement with El Salvador, requesting to limit Bitcoin purchases by the public sector.
This technical memorandum of understanding emphasizes that there must be no “voluntary accumulation of BTC” and that any issuance of debt or tokenized instrument indexed in Bitcoin will be limited to avoid liability for the public sector.
The executive director for El Salvador, Méndez Bertolo, stated that the extended credit line aims to improve the governance, transparency, and resilience of the country.
These improvements are seen as necessary to increase the confidence and growth potential of the nation. Bertolo also emphasized that the risks associated with Bitcoin are being mitigated.
The IMF program is designed to attract significant additional financial support from international organizations such as the World Bank and the Inter-American Development Bank.
These institutions are ready to provide further loans to El Salvador, totaling 3.3 billion dollars, on the condition that the country meets the new demands of the IMF.
In the context of the agreement, the Salvadoran authorities have amended the Bitcoin Law. These amendments clarify the legal nature of Bitcoin and remove the essential characteristics of legal tender from the law.
The acceptance of Bitcoin becomes voluntary, and tax payments will be made in US dollars.
Economic Stability for El Salvador?
This development represents a significant change in El Salvador’s policy regarding Bitcoin, which had been adopted as legal tender in 2021. The influence of the IMF and the need for external financial support seem to have pushed the country to reconsider its position.
The question now is: will this change of course lead to the economic stability hoped for by the Salvadoran government? The answer might lie in the country’s ability to balance its innovative crypto policy with traditional economic needs.
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