El Salvador To Continue Buying BTC Despite IMF Warning
El Salvador has said it will continue to purchase Bitcoin (BTC), possibly at an accelerated rate for its strategic reserve despite a deal with the International Monetary Fund.
El Salvador had agreed to modify its Bitcoin policy, limiting public sector involvement with the cryptocurrency and gradually phasing out its Chivo wallet.
El Salvador To Continue BTC Payment
El Salvador has said it will continue buying Bitcoin, a day after reaching a crucial financing agreement with the International Monetary Fund (IMF). The IMF had insisted the country limit its exposure to the cryptocurrency. However, Stacy Herbert, El Salvadors National Bitcoin Office Director, has said Bitcoin will remain legal tender in the country, and it will keep buying BTC to add to its strategic reserve.
El Salvador reached a $1.4 billion loan deal with the IMF. As part of the agreement, the country agreed to scale back its Bitcoin policy and make crypto payments voluntary instead of mandatory. The deal also specified that tax payments would only be made in the other official tender, the US Dollar. The IMF also wants the government to phase out its Chivo wallet. The IMF stated,
The potential risks of the Bitcoin project will be diminished significantly in line with Fund policies. Legal reforms will make acceptance of Bitcoin by the private sector voluntary.
In addition to the $1.4 billion loan, El Salvador is also expected to secure $3.5 billion in financing from other global financial institutions, including the World Bank. Responding to the IMFs announcement, Bukeles Bitcoin advisor Max Keiser, dismissed the criticism of its Bitcoin policy as bureaucratic and meaningless.
El Salvador started purchasing Bitcoin in 2021, giving it legal tender status and becoming the first country to do so. It currently holds 5968 BTC, valued at around $632 million. Despite the countrys bullishness on the asset, an October survey revealed 92% of Salvadorans do not use the asset.
Countering Negative Blowback
According to Eugene Epstein, the head of trading and structured products for North America at Moneycorp, the governments announcement about accelerating the purchase of more Bitcoin could be to counter any negative blowback from a perceived diminished status cryptocurrency's status in the country.
Given the size and likely the terms of the IMF deal, it was probably worth it for (Bukele) to do that.
El Salvador President Nayib Bukele has been hyping up the country as a Bitcoin and digital asset trading hub. It also hosted an Adopting Bitcoin conference, and is home to the Bitcoin Beach, a surfing spot where businesses accept Bitcoin payments.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Read more: https://cryptodaily.co.uk/2024/12/el-salvador-to-continue-buying-btc-despite-imf-warning
Text source: Crypto Daily™
