According to Reuters reports, El Salvador’s Congress has swiftly approved reforms after President Nayib Bukele submitted them, aligning the country’s Bitcoin policies with the conditions of its $1.4 billion loan agreement with the IMF.
El Salvador, which had previously been excluded from traditional financial markets due to its high debt and ambitious Bitcoin experiment, needed support from the IMF. With rising bond yields and limited access to new capital, securing this deal became crucial for advancing the government’s economic reform agenda.
Ruling party lawmaker Elisa Rosales stated that the amendment was crucial to securing Bitcoin’s “permanence as legal tender” while ensuring its “practical implementation.” The measure passed with 55 votes in favour.
The revised legislation removes the mandate for businesses to accept Bitcoin, making its use voluntary. It also limits tax payments to U.S. dollars and allows for scaling back government-led crypto initiatives, including the state-backed Chivo wallet.
Despite the changes, Bitcoin remains legal tender in El Salvador, and the country continues to accumulate it. Data from the National Bitcoin Office shows that El Salvador holds 6,049 BTC, valued at around $633 million, with an unrealized profit of 127%.
El Salvador became the first country to adopt Bitcoin as legal tender in September 2021. Since then, it has launched initiatives to integrate Bitcoin into its economy, including Volcano Energy, a renewable geothermal Bitcoin mining project, and Volcano Bonds, to fund infrastructure and develop Bitcoin City, a proposed tax-free crypto hub powered by volcanic energy.
Notably, on January 13, crypto heavyweight Tether Group announced plans to relocate its entire operations to El Salvador, pending acquiring a Digital Asset Service Provider license. The move follows the recent approval of the same permit for Bitfinex Derivatives, Tether’s Seychelles-based affiliate, signalling a broader shift toward establishing El Salvador as a global crypto hub.
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