[NEWS] El Salvador may be amending its Bitcoin law to receive IMF loan

El Salvador, a Latin American country known for being the first in the world to adopt Bitcoin (BTC) as legal tender, may amend part of its Bitcoin law to receive a loan from the International Monetary Fund (IMF). The Financial Times reported on the 9th.

Two sources familiar with the matter told the paper that El Salvador will remove the requirement for companies in the country to accept Bitcoin payments and allow them to choose voluntarily in order to receive a $1.3 billion loan in the next two to three weeks. With the amendment to the law, El Salvador is expected to be able to receive $1 billion in loans from the World Bank and $1 billion from the Inter-American Development Bank over the next few years.

El Salvador established Bitcoin as legal tender in 2021 and has established laws to promote its use, but is facing difficulties in widely spreading it among its citizens. The legal reform under these circumstances means that El Salvador's national strategy of pushing Bitcoin to the forefront is at a turning point.

The IMF has repeatedly warned El Salvador that treating Bitcoin as legal tender poses significant risks to financial stability and soundness.

As a condition for the loan, the IMF also requires the Salvadoran government to reduce its budget deficit to 3.5% of GDP over the next three years through spending cuts and tax increases, as well as to establish anti-corruption laws and increase reserves from $11 billion (approximately 1.662 trillion yen) to $15 billion (approximately 2.267 trillion yen).

El Salvador's Bitcoin strategy is being forced to change from its previous aggressive stance, but with the rise in the price of crypto assets (virtual currencies), it can be said that it is currently working.

According to NayibTracker, which tracks the number of Bitcoins held by El Salvador, the country's Bitcoin holdings amount to 5,942 BTC at the time of writing, equivalent to 86.6 billion yen. The average acquisition price is 44,775.50 dollars (approximately 6.76 million yen), which suggests that it is generating large profits.

In addition, El Salvador has been promoting mining using volcanic heat and abolishing taxes on domestic investments and remittances from overseas, and has been actively promoting Bitcoin in order to realize the "Bitcoin City" concept.

Attention will be focused on whether there will be any changes to this Bitcoin-first stance in the future, triggered by the partial revision of the Bitcoin Law.

Reference: Press
Image: Shutterstock

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