TLDR
- El Salvador secured a $1.4B IMF deal while maintaining Bitcoin as legal tender
- The country holds 5,968 BTC (worth ~$594M) and plans to accelerate purchases
- Private businesses will no longer be required to accept Bitcoin payments
- Government will phase out state-backed Chivo wallet while supporting private options
- Bitcoin education initiatives expanding with new programs planned for 2025
El Salvador’s stance on Bitcoin enters a new phase as the country secures a $1.4 billion loan agreement with the International Monetary Fund (IMF) while maintaining its commitment to cryptocurrency adoption. The deal, finalized on December 18, 2024, introduces changes to the country’s Bitcoin policies while preserving its status as the first nation to adopt Bitcoin as legal tender.
The National Bitcoin Office, led by Stacy Herbert, announced that El Salvador plans to continue and potentially increase its Bitcoin purchases. The country currently holds 5,968 Bitcoin in its strategic reserve, valued at approximately $594 million based on current market prices.
Under the new IMF agreement, El Salvador will modify some aspects of its Bitcoin law. Private businesses will no longer be required to accept Bitcoin as payment, making cryptocurrency transactions voluntary for the private sector. Additionally, the government will only accept tax payments in US dollars going forward.
The government plans to phase out its state-sponsored Chivo wallet, which initially provided citizens with $30 worth of Bitcoin in 2021. This move aims to encourage the development of private Bitcoin wallet services in the country.
Despite these adjustments, El Salvador’s educational initiatives around Bitcoin continue to expand. The government is preparing to introduce Bitcoin workbooks for second and third-grade students by January 2025. These materials will complement existing programs such as “Mi Primer Bitcoin” and Node Nation, which provide cryptocurrency education at the high school level.
The country is also moving forward with a certification program designed to train 80,000 civil servants through the ESIAP initiative, demonstrating its commitment to building Bitcoin expertise within the government workforce.
In the financial sector, El Salvador has begun exploring new applications of blockchain technology. Recent developments include the tokenization of US Treasuries on the Liquid Network, a project completed in partnership with NexBridge. The government indicates that more Bitcoin-related capital market initiatives are in development.
🇸🇻EL SALVADOR SECURES $3.5 FUNDING DEAL
➡️Bitcoin remains legal tender
➡️El Salvador will continue buying bitcoin (at possibly an accelerated pace) for its Strategic Bitcoin Reserve
➡️Bitcoin capital markets will continue to be built; for example, the recent tokenized issuance…— Stacy Herbert 🇸🇻🚀 (@stacyherbert) December 19, 2024
IMF spokesperson Julie Kozack confirmed the terms of the agreement, which represents a compromise between the international organization’s concerns about cryptocurrency risks and El Salvador’s innovative approach to digital assets.
President Nayib Bukele, who spearheaded the country’s Bitcoin adoption in 2021, maintains strong popular support among Salvadorans. This backing stems largely from his administration’s success in reducing crime rates, although polls indicate that citizens remain largely neutral regarding Bitcoin adoption.
The government’s Bitcoin holdings have been tracked through public blockchain data, with SpotOnChain confirming the official wallet contains over 5,900 BTC. Herbert emphasized that these holdings will continue to be maintained and potentially increased as part of the country’s strategic reserve.
El Salvador’s bond market has responded positively to recent developments. The country’s dollar-denominated bonds have seen a rally following the government’s offer to buy back notes from nine different transactions.
The IMF agreement marks a new chapter in El Salvador’s cryptocurrency journey, balancing international financial cooperation with its digital asset strategy. While some aspects of the original Bitcoin law are being modified, the core elements of the country’s cryptocurrency adoption remain intact.
Herbert’s statements on social media platform X confirm that Bitcoin will continue as legal tender alongside the US dollar. The government maintains its vision of positioning El Salvador as a hub for cryptocurrency innovation, even as it adapts to new regulatory requirements.
The immediate effects of these policy changes are yet to be seen, but the government has outlined clear plans for implementation. Private sector businesses will transition to voluntary Bitcoin acceptance, while public sector cryptocurrency activities will face new restrictions under IMF guidelines.
