A president is above all there to govern his country and solve the concrete challenges of his population, and Bitcoin is just one tool among others to help him achieve these objectives. Despite recent adjustments, El Salvador's strategy towards Bitcoin remains unchanged, with the objective of using it to modernize the economy and attract investments while meeting the needs of the people.
El Salvador adjusts its Bitcoin policy after an agreement with the IMF
El Salvador announced it would continue its bitcoin purchases, perhaps more quickly, a day after a financing agreement with the IMF, which had recommended limiting its exposure to the cryptocurrency.
Last Wednesday, El Salvador concluded a $1.4 billion loan agreement with the IMF, under which the government of President Nayib Bukele agreed to concede some aspects related to the Bitcoin law adopted in 2021.
The first measure concerns the legal tender status of Bitcoin, forcing businesses to accept it as a means of payment. This aspect could slow down adoption by imposing a solution without taking into account the specific needs of economic actors. Voluntary adoption would rather encourage a more fluid and adapted integration, thus promoting sustainable and thoughtful adoption.
Planned legal reforms in El Salvador would make private sector acceptance of bitcoin voluntary.
The second measure concerns the shutdown of Chivo, the Bitcoin wallet set up by the government. User feedback revealed several problems with this wallet, including frequent bugs, connection difficulties and an unintuitive interface.
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Many also reported security issues, such as failed transactions or unaccessible funds, leading to a loss of trust in the wallet. Compared to wallets like Blink, Chivo was less developed and offered a less quality user experience.
The only negative point of this reform is ultimately the cessation of the acceptance of tax payments in Bitcoin, which slows down the integration of BTC into the official economy and limits its advantages. It also discourages users who had adopted Bitcoin hoping for official recognition and government support for its large-scale use.
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El Salvador reaffirms commitment to Bitcoin after IMF deal
This change is not seen as a defeat for Nayib Bukele, since before being a bitcoiner, he remains a leader concerned about the real challenges of his country. With 6 million inhabitants, El Salvador has long faced problems of poverty, crime, and deplorable living conditions.
Bitcoin is above all a tool to modernize the economy and attract investments. The president's priority has always been to resolve the country's deep-seated crises, such as gang violence and lack of infrastructure, rather than focusing solely on promoting Bitcoin. It is for these reasons that when a different approach was proposed to him, a solution beneficial to his people, he took the liberty to accept it.
👉 In the news – Salvador: Bukele buys $1 million in Bitcoins 24 hours after his agreement with the IMF
However, this option does not abandon the initial strategy since just a few days after the signing of the agreement, Max Keizer, the main Bitcoin advisor of El Salvador, declared that “ President Bukele increased daily Bitcoin purchases with an interim goal of acquiring an additional 20,000 “.
While some predicted the end of the ” Bitcoin Nation » and spreading rumors about the departure of Stacy Herbert and Max Keizer from the government, the Bitcoin Office surprised everyone by adding 11 Bitcoins to its reserves twice.
El Salvador just bought another 11 bitcoin
🇸🇻🚀 https://t.co/fJ6aZdPR6r
— The Bitcoin Office (@bitcoinofficesv) December 22, 2024
This decision appears partly intended to counter growing skepticism around cryptocurrency in El Salvador, particularly in the face of Bitcoin's perceived diminished status. The government's announcement of new purchases could be a strategic response aimed at reassuring supporters and maintaining Bitcoin's image as a pillar of the Salvadoran economy.
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Sources: Reuters; Bitcoin Office
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