El Salvador, which broke new ground by accepting Bitcoin as a legal currency, continues to backpedal on the issue.
The Congress of El Salvador has approved the Bitcoin reform bill presented by President Nayib Bukele in order to comply with the requirements of the $1.4 billion loan agreement reached with the International Monetary Fund (IMF) at the end of January.
The IMF, under the agreement, asked the El Salvadoran government to reduce its involvement in Bitcoin and make Bitcoin voluntary and optional for private sector traders. With this approved Bitcoin reform bill, BTC has been made voluntary and optional for private sector traders. Previously, it was a legal requirement for businesses to accept Bitcoin as payment.
New Bitcoin Requests Came From IMF!
The IMF, which has imposed restrictions on Bitcoin, has made new demands aimed at further restricting BTC purchases as part of the $1.4 billion agreement it made with El Salvador.
Accordingly, the IMF is trying to tighten restrictions on Bitcoin purchases by the public sector in El Salvador, after the private sector.
The new demands aim to prevent the public sector from voluntarily purchasing Bitcoin and issuing related debt.
IMF El Salvador Managing Director Méndez Bertolo said that with the new demands, the risks associated with Bitcoin have decreased.
“The authorities have made amendments to the Bitcoin Law that clarify the legal nature of Bitcoin and remove the basic features of legal tender from the law.
“Bitcoin adoption will be voluntary, tax payments will be made in US dollars, and the role of the public sector in the Bitcoin project will be limited.”
The IMF is also demanding that El Salvador phase out public participation in state-backed Bitcoin wallet Chivo, liquidate the Fidebitcoin trust set up to support Bitcoin adoption, and publish audited financial statements of both Fidebitcoin and Chivo.
The government is required to disclose all Bitcoin holdings held by public institutions, as requested by the IMF, which is seeking to increase transparency. This means providing the IMF with a comprehensive list of cold and hot wallet addresses and the exact amounts held.
The IMF plans to conduct regular reviews to ensure necessary compliance in March, June, July and December 2025.
*This is not investment advice.