Congress passed a reform that modifies the so-called “ Bitcoin Law” in El Salvador to comply with the stipulated requirements in the deal inked with the IMF last year. These modifications prepare the country to receive $1.4 billion in a credit facility.
El Salvador Complies With IMF Requirements: Bitcoin Legal Tender Status Withdrawn
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El Salvador Passes Bitcoin Law Reform, BTC Acceptance Is Now Voluntary
El Salvador, a bitcoin pioneer, has taken action to reduce its adoption. The Salvadoran Congress passed a bitcoin law reform that disarms, in part, the considerations surrounding the amalgamation of bitcoin and crypto as part of the state apparatus.
The Bitcoin law reform was approved without setbacks in a Congress controlled by President Nayib Bukele’s party. It removes bitcoin’s current legal tender status and makes its acceptance voluntary.
The articles where the state compromises to provide the means to transact in bitcoin and alternatives for direct conversion between bitcoin and dollars were also purged.
The status of bitcoin as a unit of account was also modified, withdrawing provisions that allowed merchants to express prices in BTC.
Salvadorans cannot pay their taxes using bitcoin from now on, as the article that made this possible was also removed in the reform.
These changes were necessary to comply with the International Monetary Fund (IMF) requirements to grant the country a $1.4 billion credit facility. These funds will be leveraged to execute necessary payments and support Bukele’s economic reforms.
Read more: Quid Pro Quo: El Salvador Scores $1.4 Billion IMF Credit by Scaling Back Bitcoin Activities
While President Bukele minimized the effect of these reforms, and alleged they would not transform the country’s bitcoin allegiance, the modifications do bring relevant changes to the functionality of bitcoin in the country.
Before, Chivo, the Salvadoran official bitcoin wallet, was the only casualty acknowledged by the Bukele Administration, stating that it would be sold or closed.
It remains to be seen if other issues mentioned in the deal, including a confinement of BTC purchases, will be executed. Despite this, Bukele has recently ramped up El Salvador’s bitcoin purchases, in line with the popularization of the strategic bitcoin reserve idea worldwide.
Read more: El Salvador’s Bitcoin Buying Spree Continues on Christmas Day—IMF Left Watching
