El Salvador revokes Bitcoin’s status
as legal tender to secure an IMF loan
El Salvador's Legislative Assembly has revoked Bitcoin's status as legal tender, marking the end of a bold experiment that began in 2021 when the Central American nation became the first country to adopt the cryptocurrency as official currency.
The revocation approved on Jan. 30, aligns with the requirements of a $1.4 billion loan San Salvador secured from the International Monetary Fund (IMF). Fifty-five lawmakers voted in favor of removing Bitcoin as legal tender, while only two voted against.
Critics argue that the IMF strong-armed the country into abandoning its Bitcoin policies under the guise of mitigating financial risks, raising questions about the balance between national sovereignty and global financial oversight. The IMF has long pressured El Salvador to reduce Bitcoin-related risks, citing concerns over financial stability, consumer protection and transparency.
In a press release from December 2024, the IMF stated that El Salvador's Bitcoin project would be significantly scaled back as part of a staff-level agreement for the Extended Fund Facility. The agreement stipulated that Bitcoin acceptance in the private sector must be voluntary, public sector involvement in Bitcoin-related activities must be limited and the government's role in the Chivo crypto wallet must be phased out.
Article Source: naturalnews.com
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