Categories: Technology

El Salvador Makes Bitcoin Payments Voluntary for Private Sector Merchants to Comply with IMF Loan Conditions


El Salvador is introducing reforms to the use of Bitcoin in its financial and industrial sectors. The Central American country has agreed on a deal with the International Monetary Fund (IMF) to receive a loan of $1.4 billion (roughly Rs. 12,130 crore). As part of the agreement between the IMF and El Salvador, the government will limit its engagement with the world’s most widely used cryptocurrency. To align with IMF’s condition, El Salvador has made BTC payments voluntary for local merchants in the private sector. A report by Reuters said that this decision was approved and finalised by the country’s legislature earlier this week.

Lawmaker Elisa Rosales extended the amendment to the Legislative Assembly for a voting process this week. There were only two votes against the reform, while 55 legislators voted in favour, leading to its finalisation. Rosales said the move would promote and ensure a practical use of the crypto asset that will subsequently strengthen its permanence as a legal tender, Reuters reported added.

El Salvador Rushes Crypto Reforms to Receive IMF Loan

The deal between El Salvador and the IMF was finalised in December 2024. Over the next 40 months, the IMF will give the country a loan of $1.4 billion (roughly Rs. 12,130 crore) to help stabilise the country’s economy. At the time, the IMF said, “The Salvadoran authorities and a staff team from the IMF have reached staff-level agreement on a 40-month extended arrangement to address balance of payment needs and support the government’s economic reforms. The potential risks of the Bitcoin project will be diminished significantly in line with fund policies. Legal reforms will make acceptance of Bitcoin by the private sector voluntary.”

As part of the agreement, El Salvador will also ‘confine’ its public sector’s exposure to BTC-related activities. As per the IMF’s instructions, the country must accept taxes only in the form of US dollars, and not BTC. In addition, the country has also been asked to gradually unwind its participation in pushing adoption of its crypto wallet ‘Chivo’.

The IMF withheld financial aid to El Salvador since April 2024 Later in October, the IMF asked the country to narrow the scope of its Bitcoin legislation and limit the exposure of the public to this volatile asset.

While El Salvador incurred the IMF’s wrath due to its crypto-friendly policies, it also managed to attract Web3 firms to establish their offices in the country. Tether said it would relocate its headquarters to El Salvador. Similarly, Jack Dorsey-backed Bitcoin miner Ocean also moved its head office there last year.



Source link

24timenews.com

Recent Posts

Champions Trophy – Aus vs Eng – Josh Inglis savours ‘special’ innings as Australia make winning start

By the time Australia's fourth wicket fell, Josh Inglis had switched into declutter mode. There…

1 hour ago

Maserati GranCabrio gains new entry-level powertrain

Maserati has revealed the GranCabrio 490 The new entry-level model of the GranCabrio lineup packs…

2 hours ago

New microscope can image, at once, the full 3D orientation and position of molecules in cells

Two heads are better than one, as the saying goes, and sometimes two instruments, ingeniously…

2 hours ago

Apple’s Foldable iPhone Tipped to Sport 7.74-Inch Inner Screen That ‘Unfolds Like iPad’

Apple is working on a foldable iPhone that could rival smartphones launched by companies like…

2 hours ago

GRN unveils rebranding with launch of GRNconnect 2.0 & GRNexpert platform, ET TravelWorld

GRN, leading travel service provider, has announced a comprehensive rebranding initiative, introducing a suite of…

11 hours ago

Champions Trophy 2024/25, PAK vs IND 5th Match, Group A Match Preview

Big picture: Pakistan's fight for survivalIf ever Pakistan needed a miracle, it is now. Not…

11 hours ago