👉👉👉 #elsalvador Secures #IMF Deal as #BitcoinAdoption Becomes Voluntary
El Salvador Secures $1.4 Billion IMF Agreement, Shifts Bitcoin Policy
- El Salvador has reached a $1.4 billion agreement with the International Monetary Fund (IMF), marking a significant shift in the country's approach to Bitcoin. Under the new deal, Bitcoin acceptance will be voluntary for the private sector, with limited involvement from the public sector.
Key Aspects of the Agreement
1. Fiscal Measures: The deal includes fiscal consolidation goals, targeting a 3.5% improvement in the primary balance over the next three years.
2. Debt Reduction: El Salvador’s public debt, projected to reach 85% of GDP in 2024, is expected to decrease under the new program.
3. Additional Financing: The agreement anticipates $3.5 billion in additional financing from the World Bank and regional development banks to support economic reforms.
Changes to Bitcoin’s Role in the Economy
As part of the agreement, El Salvador plans to reduce Bitcoin’s role in the economy:
1. Private Sector Adoption: Bitcoin adoption will become voluntary for businesses, while the public sector will limit its use.
2. Taxation in USD: Taxes will only be accepted in U.S. dollars, further diminishing Bitcoin’s official role.
3. Chivo Wallet: The government will gradually wind down the Chivo e-wallet operations and restrict Bitcoin-related transactions.
This announcement comes as Bitcoin’s price has recently dropped to just above $100,000, following its previous all-time high of $108,000. The decline follows market reactions to the Federal Reserve’s hawkish stance on interest rates. Despite these changes, El Salvador’s economy remains resilient, supported by strong remittances, growing tourism, and improved security conditions.
