Key Highlights:
- The International Monetary Fund (IMF) has approved a 40-month, $1.4 billion Extended Fund Facility (EFF) for El Salvador, aimed at limiting the country’s bitcoin initiatives.
- As of February 24, El Salvador possesses over 6,081 BTC, valued at approximately $600 million, but is restricted from voluntarily acquiring more bitcoin in the public sector during this program.
- The IMF’s goal includes a 3.5% improvement in GDP balance over three years and a projected economic growth of 2.5% to 3% in the medium term, expecting debt to decrease to 81% of GDP by 2029.
El Salvador’s aspirations for broader bitcoin utilization are now confined due to the latest IMF arrangements, seeking stability amid high volatility and limited public trust in the cryptocurrency’s usage. President Nayib Bukele has recently announced the addition of 19 BTC to the nation’s holdings, coinciding with drops in the asset’s value below $90,000.
In its review, the IMF indicated that the use of bitcoin remains minimal in El Salvador, attributable to high price fluctuations and low confidence from the public. Furthermore, it was noted that tax contributions in bitcoin have been negligible and that the financial sector currently has no exposure to this cryptocurrency.
A prior condition for the EFF’s approval involved amending the Bitcoin Law to make acceptance of bitcoin voluntary for private businesses, effectively revoking its mandatory legal tender status.
Disclaimer:
Parts of this article incorporate AI-generated content, ensuring accuracy and alignment with editorial standards.
