President Bukele declares that El Salvador’s Bitcoin acquisition will not stop anytime soon, directly contradicting the International Monetary Fund’s stipulations following the release of the IMF report.
Recent changes to the country’s Bitcoin Law have significantly altered its role. The law makes accepting Bitcoin optional for businesses, removes government support for its use, and no longer designates Bitcoin as legal tender.
Notably, these changes followed the IMF’s approval of a $1.4 billion loan to El Salvador, contingent on addressing the risks associated with Bitcoin.
The IMF confirmed that these reforms, including making Bitcoin acceptance voluntary and maintaining US dollar-only tax payments, align with their policies.
Bukele Declares Bitcoin Stance
Bukele shared a post from the Bitcoin Office announcing the acquisition of another Bitcoin on March 4th, adding his emphatic statement:
“‘This all stops in April.’ ‘This all stops in June.’ ‘This all stops in December.’ No, it’s not stopping, “If it didn’t stop when the world ostracized us and most ‘bitcoiners’ abandoned us, it won’t stop now, and it won’t stop in the future.”
The ambiguity surrounding the identity of the “bitcoiners” referenced only heightens his assertive defiance.
El Salvador Clashes with IMF
El Salvador began buying Bitcoin in September 2021, starting with 400 coins. They later announced daily purchases. El Salvador’s government now possesses approximately 6,101 Bitcoin.
This controversial move drew heavy international criticism, but it demonstrates the country’s commitment to its cryptocurrency strategy, defying the IMF.
This commitment is at the heart of a major disagreement with the IMF, which gave El Salvador a $1.4 billion loan. A recent IMF report advised El Salvador to stop buying Bitcoin, but President Bukele has refused.
The IMF’s loan conditions explicitly require El Salvador to end its Bitcoin purchases and mining. El Salvador’s Central Bank President and Finance Minister agreed to this.
El Salvador’s Bitcoin policy clashes with its IMF loan agreement. The IMF insists Bitcoin can only be acquired legally, for example, through seizure. President Bukele’s continued Bitcoin purchases, however, suggest the government might not be following the agreement.
This discrepancy raises serious questions about El Salvador’s future Bitcoin plans and its relationship with international lenders. The situation is volatile and will likely remain a significant point of conflict.
