TechFlow news, on March 4, according to Cointelegraph, the International Monetary Fund (IMF) is seeking to tighten restrictions on Salvadoran public sector purchases of bitcoin as part of a $1.4 billion extended financing arrangement with the country. On March 3, the IMF submitted new requirements for the fund's extended arrangement to El Salvador, including a technical memorandum of understanding that explicitly states the condition that "the Salvadoran public sector shall not voluntarily accumulate bitcoin."
The memorandum also requires limiting the issuance by the public sector of "any type of debt or tokenized instrument linked to or denominated in bitcoin that constitutes a liability for the public sector." El Salvador's Executive Director Méndez Bertolo emphasized in a statement dated February 26 that the IMF's Extended Fund Facility is intended to "improve governance, transparency, and resilience, boost confidence, and enhance national growth potential."
Bertolo stated: "At the same time, risks related to bitcoin are being mitigated. The authorities have revised the Bitcoin Law, clarifying the legal nature of bitcoin and removing its essential characteristics as legal tender. The adoption of bitcoin will be voluntary, taxes will be paid in U.S. dollars, and the role of the public sector in bitcoin-related initiatives will be limited." The program is expected to attract "significant additional financial support" from the World Bank, the Inter-American Development Bank, and other regional development banks.
