El Salvador remains steadfast in its commitment to Bitcoin adoption, announcing plans to accelerate Bitcoin purchases, even after finalizing a $1.4 billion financing agreement with the International Monetary Fund (IMF).
The IMF deal urged the government to scale back its Bitcoin policies to reduce risks. However, Stacy Herbert, director of El Salvador’s National Bitcoin Office, reaffirmed the country’s dedication to Bitcoin as a strategic reserve asset.
Bitcoin as a Strategic Reserve
In a statement shared on X (formerly Twitter), Herbert confirmed El Salvador’s plans to continue shaping Bitcoin policies, attracting investments, and launching educational initiatives. She also revealed that the country would maintain its daily Bitcoin purchasing program, buying one Bitcoin per day.
President Nayib Bukele had earlier stated that this practice would persist until Bitcoin becomes “unaffordable with fiat currencies.”
As of now, El Salvador holds 5,969 BTC, valued at approximately $579 million, cementing its position as one of the largest government Bitcoin holders globally.
Chivo Wallet Phase-Out Amid IMF Agreement
On Wednesday, El Salvador finalized a $1.4 billion loan agreement with the IMF.
Key stipulations of the agreement include:
- Tax payments must be made in U.S. dollars, the country’s other official currency.
- The government will reduce its involvement in Bitcoin-related activities, including its role in the Chivo wallet.
The Chivo wallet, launched as the official platform for Bitcoin transactions, has seen limited adoption. A recent survey indicated that 92% of Salvadorans have not used Bitcoin despite its status as legal tender.
Herbert confirmed plans to either sell or phase out the Chivo wallet, emphasizing that private sector wallets will continue to operate, ensuring Bitcoin accessibility for users.
Balancing IMF Requirements and Bitcoin Ambitions
While the loan agreement reflects a scaling back of Bitcoin policies, it also acknowledges the government’s efforts to align with IMF guidelines by reducing associated risks and keeping private sector adoption voluntary.
The government maintains that its Bitcoin risks will decrease significantly over time, adhering to the terms of the loan agreement while continuing to position Bitcoin as a cornerstone of its financial strategy.
El Salvador’s Vision for Bitcoin
Despite the IMF’s cautious stance, El Salvador’s government views Bitcoin as a hedge against economic instability and a tool for financial innovation.
“Our focus remains on advancing Bitcoin adoption, creating investment opportunities, and fostering education to empower Salvadorans,” Herbert stated.
El Salvador’s commitment to daily Bitcoin purchases signals its long-term belief in the cryptocurrency’s potential, even as it navigates global scrutiny and economic challenges.
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