TechFlow News, December 19 — According to Cointelegraph, El Salvador has reached a $1.4 billion loan agreement with the International Monetary Fund (IMF), under which it will receive financial support over the next 40 months. As part of the deal, the country will make merchant acceptance of bitcoin payments voluntary, discontinue participation in the rarely used Chivo wallet, and place "restrictions" on public sector involvement in bitcoin-related economic activities.
The IMF stated that these measures will significantly reduce potential risks associated with the bitcoin initiative, while clearly defining limited public sector participation in bitcoin-related economic activities. Additionally, taxes will be payable only in U.S. dollars, not in bitcoin. The agreement still requires approval from the IMF's Executive Board and marks the end of four years of negotiations since El Salvador adopted bitcoin as legal tender in June 2021. The IMF had previously warned multiple times that bitcoin's speculative nature could pose financial risks to the country. The agreement is also expected to unlock additional financing from institutions such as the World Bank, bringing total funding to over $3.5 billion.
Nevertheless, Max Keiser, bitcoin advisor to El Salvador’s president, dismissed the news on social media platform X, claiming that bitcoin usage in the country has "never been more active and continues to grow." However, surveys show that 92% of Salvadorans have not used bitcoin for transactions—a rise from 88% in 2023.
