IMF seeks to tighten restrictions on public sector purchases of Bitcoin in El Salvador

According to Cointelegraph, the International Monetary Fund (IMF) is seeking to tighten restrictions on public sector purchases of Bitcoin in El Salvador as part of a $1.4 billion deferred financing arrangement with the country. On March 3rd, the IMF submitted new requirements for fund expansion arrangements to El Salvador, including a technical memorandum of understanding that explicitly states the condition that "El Salvador's public sector shall not voluntarily accumulate Bitcoin". The memorandum also calls for restrictions on the public sector issuing "any type of debt or tokenization instrument linked to or denominated in Bitcoin that constitutes a liability to the public sector". Salvadoran Executive Director M é ndez Bertolo emphasized in a accompanying statement on February 26 that the IMF's expanded fund mechanism aims to "improve governance, transparency, and resilience, boost confidence, and enhance national growth potential. Bertolo stated, "At the same time, risks related to Bitcoin are being mitigated. The authorities have revised Bitcoin laws, clarified the legal nature of Bitcoin, and removed the basic characteristics of legal tender. Accepting Bitcoin will be voluntary, taxes will be paid in US dollars, and the role of the public sector in Bitcoin projects will be limited." The plan is expected to attract "significant additional financial support" from the World Bank, the Inter American Development Bank, and other regional development banks.