- El Salvador acquired $1.06 million in Bitcoin, raising its total holdings to 5,991.78 BTC.
- The IMF agreement requires reduced government involvement in Bitcoin activities.
- BTC remains legal tender in El Salvador despite regulatory adjustments.
El Salvador has purchased another $1.06 million worth of BTC, boosting its holdings to 5,991.78 BTC with a value of $580 million. The investment follows another purchase reported on December 19th, a day after the country gained a $1.4 billion agreement with the International Monetary Fund.
Shift in Bitcoin Acquisition
The president’s acquisition noted on X, which has added another 11 BTC to the nation’s Strategic Bitcoin Reserve, comes as El Salvador modifies its digital assets activities under necessities set by the IMF. While supporters view Bitcoin as a barrier against inflation, critics highlight its volatility. Despite differing opinions, El Salvador remains committed to its purchases.
El Salvador became the first nation to embrace BTC as a legal tender in September 2021. The nation’s commitment to Bitcoin remains critical despite changes to state involvement in its adoption. With this recent addition, the country continues to build its Bitcoin reserve while adhering to the IMF’s conditions.
The latest purchase marks a departure from President Nayib Bukele’s one Bitcoin per day strategy initiated in November 2022. Stacy Herbert, director of the National Bitcoin Office, indicated that the pace of future Bitcoin purchases may accelerate. Despite the changes, a spokesperson for the National Bitcoin Office confirmed that the government intends to continue acquiring Bitcoin without plans to sell its existing holdings.
IMF Financing Agreement and Conditions
The financing agreement reached on December 18th includes provisions to limit government involvement in Bitcoin-related activities. Key requirements outlined by the IMF include ensuring private-sector Bitcoin use remains voluntary, mandating tax payments in U.S. dollars, and reducing government engagement with the Chivo wallet.
The government is expected to sell or discontinue the Chivo wallet, leaving private-sector solutions to facilitate Bitcoin transactions. While these conditions reshape the government’s role, Herbert affirmed that Bitcoin’s legal tender status remains unchanged in the country.
The $1.4 billion IMF financing deal still awaits authorisation from the IMF Executive Board. The agreement marks the culmination of prolonged negotiations complicated by concerns about the risks posed by El Salvador’s Bitcoin adoption policies. The terms of the agreement aim to balance financial stability while maintaining Bitcoin’s role as legal tender.
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