El Salvador Updates Bitcoin Law to Comply with IMF Deal
Key Points:
- El Salvador’s Congress approved a bill to amend its Bitcoin law to adhere to IMF requirements.
- The reform passed with 55 votes in favor and only two against.
- In December, El Salvador made changes to its Bitcoin law to secure a $1.3 billion loan from the IMF.
El Salvador’s Congress recently passed a bill to modify its Bitcoin law in order to satisfy an agreement made with the International Monetary Fund (IMF).
According to a report by Reuters on January 29, the bill was swiftly approved after President Nayib Bukele submitted it for consideration.
Legal Tender
In 2021, El Salvador made history by becoming the first country to recognize Bitcoin as legal tender. This decision required all businesses to accept Bitcoin as a form of payment, garnering international attention, including from the IMF.
Following the adoption of Bitcoin, the IMF recommended narrowing the scope of the Bitcoin law and enhancing supervision of the payment system. This advice was reiterated in January 2022, with further calls to limit public exposure to Bitcoin.
New Deal
To secure a $1.3 billion loan from the IMF, El Salvador revised its Bitcoin legislation in December. The changes included making it optional for businesses to accept Bitcoin and implementing measures to reduce the budget deficit while increasing reserves.
This deal is anticipated to unlock additional funding from the World Bank and the Inter-American Development Bank in the coming years.