Bitcoin News Today: El Salvador Defies IMF, Adds 21 BTC to 4-Year Bitcoin Experiment

El Salvador's government increased its Bitcoin holdings by 21 BTC on Sunday to commemorate the fourth anniversary of its Bitcoin legal tender law, raising the total to 6,313.18 BTC, valued at approximately $702 million at current market prices [1]. This acquisition aligns with the nation's ongoing "one Bitcoin a day" strategy, a symbolic gesture reflecting Bitcoin's 21 million coin supply limit. Despite this, the country faces challenges in compliance with the International Monetary Fund (IMF), which, as part of a $1.4 billion loan agreement, required El Salvador to halt public sector Bitcoin purchases [1].

The government initially embraced Bitcoin in 2021, becoming the first country to adopt it as legal tender alongside the U.S. dollar. The move was intended to enhance financial inclusion and lower remittance costs. However, this initiative has encountered mixed reception, with critics highlighting volatility and macroeconomic risks. The government has since made adjustments to its Bitcoin policy, including revising the Bitcoin Law to make merchant acceptance of Bitcoin voluntary while retaining its legal tender status [1].

In a separate development, El Salvador added 14,000 troy ounces of gold to its reserves, marking its first precious metals purchase since 1990. This move aligns with IMF guidance and is part of a broader strategy to diversify its international reserves. The acquisition increased the nation's gold holdings to 58,105 troy ounces, with the gold valued at $207.4 million [2]. The Central Reserve Bank emphasized the importance of gold as a strategic asset, noting its role in global central bank reserves and the broader trend of central banks acquiring gold in recent years [2].

Despite the IMF's insistence on halting Bitcoin purchases, El Salvador has continued to build its reserves. As of the latest data, the country's Bitcoin portfolio has yielded a 127% gain based on the average acquisition price of $46,000 per Bitcoin. This profitability is a key factor in the government's continued interest in Bitcoin. Analysts suggest that the on-chain movements observed may be attributed to internal transfers rather than new acquisitions, but the government remains under scrutiny for full compliance with the IMF loan conditions [2].

El Salvador’s Bitcoin Office has also expanded its educational initiatives, certifying 80,000 public servants in Bitcoin by 2025 and introducing Bitcoin education for students aged seven and older. The government is preparing to host BITCOIN HISTÓRICO, a state-backed cryptocurrency conference in November [4]. These efforts reflect a broader push to integrate Bitcoin into the country’s economic infrastructure, despite mixed results from the initial adoption experiment.

However, the government's Bitcoin policy has faced significant criticism. Critics argue that the initiatives primarily benefit the government rather than the general population, with calls for more education to enhance local adoption of Bitcoin. The Bitcoin community remains divided on the success of El Salvador's experiment, with some advocating for a more decentralized approach to cryptocurrency adoption [4]. The government's continued purchases of Bitcoin and gold underscore its commitment to diversifying its economic strategy, despite the challenges and criticisms it faces.

Source:

[1] El Salvador Scoops Another 21 BTC for Nation's Bitcoin Day (https://finance.yahoo.com/news/el-salvador-scoops-another-21-022519073.html)

[2] El Salvador Adds 14,000 Troy Ounces of Gold After Bitcoin (https://finance.yahoo.com/news/el-salvador-adds-14-000-103930646.html)

[3] Nayib Bukele Says El Salvador Is Buying 21 BTC For (https://www.benzinga.com/crypto/cryptocurrency/25/09/47540136/nayib-bukele-says-el-salvador-is-buying-21-btc-for-bitcoin-day-adds-over-2-million-to-apex-crypto-reserves-heres-the-total-value)

[4] El Salvador Celebrates Four-Year Bitcoin Anniversary, but (https://cointelegraph.com/news/el-salvador-bitcoin-anniversary-mixed-results-4-years)

[5] Nayib Bukele Says El Salvador Is Buying 21 BTC For Bitcoin (https://finance.yahoo.com/news/nayib-bukele-says-el-salvador-042048784.html)