El Salvador Announces Continued Bitcoin Purchases Despite IMF Warnings

(CLO) El Salvador announced on Thursday that it will continue to buy more Bitcoin, possibly even speeding up the process, a day after signing a loan agreement with the International Monetary Fund (IMF). Under the agreement, the government of El Salvador pledged to reduce its exposure to cryptocurrencies.

Stacy Herbert, Director of El Salvador's National Bitcoin Office, posted on X that Bitcoin will remain legal tender in the Central American country. The government will continue to add to its strategic Bitcoin reserves, despite the policy changes.

Illustration: Internet

Earlier on Wednesday, El Salvador signed a $1.4 billion loan agreement with the IMF, in which President Nayib Bukele's government agreed to restrict the use of Bitcoin. The agreement requires taxes to be paid in U.S. dollars, the country's official currency, instead of Bitcoin.

IMF spokesperson Julie Kozack said on Thursday that legal reforms in El Salvador will make Bitcoin adoption in the private sector a voluntary option, not mandatory.

Eugene Epstein, head of trading and products for North America at Moneycorp in New Jersey, said the El Salvador government's announcement to buy more Bitcoin may be a response to negative concerns about the decline in the value of cryptocurrencies in the country. He said that given the size and terms of the agreement with the IMF, the decision was necessary for President Bukele's government.

El Salvador currently owns 5,968 Bitcoins, worth about $594 million. Bitcoin's value has surged in recent days after US President-elect Donald Trump reiterated his plan to create a strategic reserve for the cryptocurrency, similar to the US strategic oil reserve.

In September 2021, El Salvador became the first country in the world to officially recognize Bitcoin as legal currency alongside the US dollar. The decision was controversial and drew criticism from the IMF, which warned of financial and legal risks and said the plan was "not yet realized."

However, President Bukele has been relentless in promoting the country as a hub for digital currency trading. Last month, he hosted the “Adopt Bitcoin” conference. El Salvador is also home to “Bitcoin Beach,” a popular surfing spot where businesses have begun accepting Bitcoin as a primary payment method.

Ngoc Anh (according to Reuters, AFP, Yahoo)

Source: https://www.congluan.vn/el-salvador-tuyen-bo-tiep-tuc-mua-bitcoin-bat-chap-canh-bao-cua-imf-post326643.html