El Salvador reaches a $1.4 billion loan agreement with the IMF, and Bitcoin payments will become voluntary

PANews reported on December 19 that according to Cointelegraph , El Salvador reached a US$1.4 billion loan agreement with the International Monetary Fund (IMF) and plans to receive financial support in the next 40 months. As part of the deal, the country will make merchant acceptance of Bitcoin payments voluntary while gradually reducing government involvement in Bitcoin-related projects, including phasing out management of state-backed wallet app Chivo.

The IMF stated that this move will significantly reduce the potential risks posed by the Bitcoin project, while clearly limiting the public sector’s specific participation in Bitcoin economic activities. Additionally, taxes will only be paid in U.S. dollars, not Bitcoin. The agreement, which still requires approval by the IMF’s executive board, marks the end of four years of negotiations with the IMF since El Salvador adopted Bitcoin as legal tender in June 2021. The IMF has repeatedly warned that the speculative nature of Bitcoin may bring financial risks to the country. The agreement will also lead to additional financing from institutions such as the World Bank, bringing the total financing amount to more than $3.5 billion.

Despite this, Max Keizer, the Bitcoin advisor to the President of El Salvador, expressed disdain on social media X, saying that the use of Bitcoin in the country has “never been more active and continues to grow.” However, the survey showed that 92% of Salvadorans do not use Bitcoin for transactions, an increase from 88% in 2023.