El Salvador Implements Bitcoin Policy Changes Following IMF Agreement

TLDR

• El Salvador has modified its Bitcoin laws under a $1.4 billion IMF agreement, keeping it as legal tender but making acceptance optional
• The country continues aggressive Bitcoin accumulation with 6,049 BTC holdings showing 127% profit
• Legislation passed swiftly through Congress with 55 votes in favor, restricting tax payments to USD
• Tether Group plans full relocation to El Salvador after securing necessary licensing
• Government maintains crypto-friendly stance while scaling back some state initiatives like Chivo wallet

El Salvador’s groundbreaking Bitcoin experiment has entered a new phase as the country adjusts its cryptocurrency policies to align with International Monetary Fund requirements. The Central American nation’s Congress passed reforms that maintain Bitcoin’s legal tender status while removing mandatory acceptance requirements for businesses.

The swift legislative action came as El Salvador secured a $1.4 billion loan agreement with the IMF. The reforms passed with overwhelming support, receiving 55 votes in favor, demonstrating the ruling party’s unified approach to economic policy under President Nayib Bukele’s leadership.

Under the new framework, businesses now have the choice to accept Bitcoin rather than being required to do so. The government has also restricted tax payments to U.S. dollars, addressing key concerns raised by international financial institutions about the country’s exposure to cryptocurrency volatility.

Despite these adjustments, El Salvador’s commitment to cryptocurrency remains clear through its continued Bitcoin accumulation strategy. The National Bitcoin Office reports holdings of 6,049 BTC, valued at approximately $633 million, representing a 127% unrealized profit on the country’s investment.

The government recently departed from its “1 Bitcoin a day” acquisition program, purchasing 11 BTC in a single transaction following the IMF agreement. This was followed by an additional purchase of 12 BTC on January 21, 2025, indicating an accelerated accumulation strategy.

Infrastructure development continues to support the country’s crypto-friendly stance. Over 200 Bitcoin ATMs operate throughout El Salvador, making it one of the most accessible regions for cryptocurrency transactions worldwide.

The Volcano Energy project represents another ambitious initiative, using renewable geothermal energy from volcanic sources for Bitcoin mining. Additionally, the government maintains plans for Bitcoin City, envisioned as a tax-free cryptocurrency hub powered by sustainable energy.

In a move that reinforces El Salvador’s appeal to crypto businesses, Tether Group announced plans to relocate its entire operations to the country. This decision followed its affiliate, Bitfinex Derivatives, securing a Digital Asset Service Provider license through its Seychelles-based entity.

The reforms come at a crucial time for El Salvador’s financial strategy. Previously locked out of traditional financial markets due to high debt and its unconventional Bitcoin policies, the IMF agreement provides needed access to international funding while preserving the country’s crypto initiatives.

President Bukele has maintained his characteristic confidence in the country’s Bitcoin strategy. After news broke about former Senator Bob Menendez’s bribery conviction, Bukele pointed out the irony of Menendez’s previous criticism of El Salvador’s Bitcoin adoption as potentially enabling corruption.

The National Bitcoin Office, under Director Stacy Herbert, continues to play a central role in managing the country’s cryptocurrency strategy. Herbert has indicated plans to maintain an aggressive Bitcoin acquisition pace, suggesting that recent policy modifications haven’t altered the government’s long-term vision.

While some state-led crypto initiatives, including the Chivo wallet program, will see adjustments under the new framework, these changes appear aimed at streamlining rather than diminishing the country’s overall crypto strategy.

El Salvador’s Congress has shown its ability to implement rapid changes to support the government’s economic agenda, with the recent reforms passing within minutes of their introduction. This legislative efficiency highlights the administration’s effective control over policy implementation.

The country’s pioneering role in cryptocurrency adoption, which began on September 6, 2021, continues to evolve. While the initial policies have been modified, the core commitment to integrating digital assets into the national economy remains unchanged.

These policy adjustments represent El Salvador’s pragmatic approach to balancing international financial requirements with its innovative cryptocurrency strategy. The changes preserve the essence of the country’s Bitcoin experiment while addressing concerns from global financial institutions.

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