El Salvador Makes Bitcoin Acceptance Voluntary to Secure IMF Loan

The reform aligns with a $1.4 billion IMF loan agreement, scaling back the government's cryptocurrency initiatives.

El Salvador's legislature approved a reform making bitcoin acceptance voluntary for private sector merchants, a condition of a $1.4 billion IMF loan agreement.
The IMF required El Salvador to limit public sector involvement in bitcoin, unwind its promotion of the Chivo wallet, and accept taxes only in U.S. dollars.
The reform aims to balance bitcoin's status as legal tender with practical implementation and risk mitigation, according to lawmakers.
Bitcoin was adopted as legal tender in 2021, but surveys show limited use, with 92% of Salvadorans not utilizing the cryptocurrency in 2024.
Despite the reforms, President Nayib Bukele's government has signaled continued bitcoin purchases for national reserves.