El Salvador’s Legislative Assembly approved a bill to revise and potentially scale back the country’s bitcoin adoption strategy — to comply with the requirements of the $1.4 billion deal with the International Monetary Fund.
According to Reuters, the bill was approved by Congress with 55 votes in favor and two votes against, only minutes after President Nayib Bukele sent it to the assembly.
Last month, El Salvador reached a deal with the IMF that included a $1.4 billion loan to support the country’s reform agenda and address its balance of payments. The IMF’s fund facility, which will last 40 months, is expected to support El Salvador with an estimated $3.5 billion.
In exchange for the fund facility, the IMF deal required El Salvador to limit various bitcoin-related activities. This includes making bitcoin acceptance voluntary for the country’s private sector, which is stipulated in the recently approved bill, according to Reuters.
“Transparency, regulation, and supervision of digital assets will be enhanced to safeguard financial stability, consumer and investor protection, and financial integrity,” the IMF said in a previous statement regarding the deal with El Salvador.
El Salvador became the first country to formally adopt bitcoin as a legal tender in 2021 to promote financial inclusion, following Bukele’s proposal. The government led by Bukele has also embraced bitcoin as a reserve asset, currently holding 6,049 BTC, valued at around $636 million, according to Arkham Intelligence data.
Last August, however, President Bukele acknowledged mixed results from the country's bitcoin experiment, citing slower-than-expected adoption of bitcoin.
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