TechFlow news, on February 2, according to Spain's El País, El Salvador's Congress recently approved reforms to the Bitcoin Law, officially removing bitcoin's status as legal tender. The reform came after nearly two years of pressure from the International Monetary Fund (IMF), which set a condition to "reduce bitcoin-related risks" in exchange for approving a much-needed $1.4 billion loan for President Nayib Bukele. Legislators amended six provisions and repealed three out of sixteen clauses. From now on, bitcoin will no longer be considered "currency"; its acceptance shifts from mandatory to voluntary, and it cannot be used for tax payments. The ruling party made these changes reluctantly. Although President Bukele is highly active on social media, he has not commented on this matter.
The law had been in effect for over three years. Public opinion surveys showed that despite 71% of the population opposing it, bitcoin was adopted as legal tender in El Salvador in September 2021. Nevertheless, the government invested more than $200 million to build an operational framework, create a digital wallet, and install ATMs nationwide. To encourage adoption, the government offered a $30 bonus to every individual who installed the official Chivo wallet on their phone. According to one of El Salvador’s most reputable polling firms, Ludop, only 21% of the population had used the service one year later. By 2024, only 8.1% of the population reported having used it.
