El Salvador Secures $1.4 Billion IMF Loan After Easing Bitcoin Policies
El Salvador has reached a $1.4 billion (£1.1 billion) loan agreement with the International Monetary Fund (IMF) after scaling back its controversial Bitcoin policies. The global financial institution stated that risks associated with the adoption of Bitcoin had significantly decreased, as businesses will now have the option to decide whether or not to accept the cryptocurrency.
Bitcoin Legal Tender Policy Adjusted
In 2021, El Salvador made history by becoming the first country to adopt Bitcoin as legal tender. However, the IMF had previously expressed concerns about the policy, warning that it could hinder financial aid negotiations. Under the new agreement, legal reforms will ensure that Bitcoin acceptance by private sector businesses remains voluntary. Additionally, the public sector will have limited involvement in Bitcoin-related economic activities, transactions, and purchases.
IMF Loan to Boost El Salvador’s Economy
The IMF’s executive board still needs to approve the deal, which aims to support El Salvador’s economy. The fund emphasized that “the potential risks of the Bitcoin project will be diminished significantly in line with Fund policies.”
Bukele Celebrates Bitcoin Surge
Despite the policy shift, El Salvadoran President Nayib Bukele remains optimistic about Bitcoin’s future. Following Donald Trump’s victory in the U.S. presidential election on November 5, Bitcoin surged past $108,000, briefly hitting a new all-time high. Bukele took to social media to celebrate the rally, highlighting that El Salvador’s Bitcoin holdings had more than doubled in value.
Bukele also criticized his political opponents, accusing them of causing many Salvadorans to miss out on Bitcoin’s meteoric rise. His government has continued to accumulate Bitcoin, betting on its long-term value appreciation.
Cryptocurrency Market Reacts to U.S. Federal Reserve Announcement
The broader cryptocurrency market experienced a pullback on Thursday after the U.S. Federal Reserve signaled a slower pace of interest rate cuts in 2025. Bitcoin, which recently surpassed the $100,000 mark, saw a slight decline along with global stock markets in response to the Fed’s announcement.
Future of Bitcoin in El Salvador
While the IMF agreement marks a shift in El Salvador’s approach to Bitcoin, the country remains a key player in the cryptocurrency space. As the global regulatory landscape evolves and Bitcoin adoption continues to grow, all eyes will be on how El Salvador balances its crypto ambitions with international financial stability.
Stay tuned for further updates on El Salvador’s Bitcoin policies and their impact on the nation’s economy.