El Salvador Amends Bitcoin Law to Comply With IMF

El Salvador has voted to amend its Bitcoin legislation as part of a financial reform agreement with the International Monetary Fund (IMF). 

The move comes after the country secured a $1.4 billion loan from the IMF’s Extended Fund Facility (EFF) in December 2024 to support its reform agenda.

El Salvador Businesses No Longer Required to Accept Bitcoin

The news was first reported by Reuters. It revealed that businesses will no longer be required to accept BTC, making its use voluntary in the private sector. 

The government has also agreed to stop accepting tax payments in BTC and to gradually phase out the Chivo wallet, the state-issued cryptocurrency wallet. The measure was passed with 55 votes in favor and only two against.

El Salvador became the first country to adopt BTC as legal tender in December 2021, a decision that had faced ongoing scrutiny from the IMF. The organization had warned that the policy posed “macroeconomic, financial, and legal” risks, urging the government to reverse course. President Nayib Bukele had previously dismissed these concerns, often responding to the IMF’s pressure with social media posts.

Earlier this month, the country purchased 11 additional BTC, worth approximately $1 million, bringing its total BTC holdings to around $637 million based on current market prices.

The investment has yielded an all-time return of 129%, and in December, the head of the country’s National Bitcoin Office indicated that the country plans to accelerate its BTC acquisitions.

Related: More Governments To Adopt Bitcoin by 2025: Fidelity

A government survey from October 2024 found that only 7.5% of Salvadorans had used Bitcoin for transactions in the past year. Ironically, many citizens reportedly used the Chivo wallet primarily to store and transfer U.S. dollars rather than BTC.