Bitcoin News Today: IMF loan halts El Salvador Bitcoin accumulation citizens see no benefits

El Salvador’s Bitcoin reserve has failed to deliver tangible benefits to the average citizen, according to Quentin Ehrenmann, general manager of My First Bitcoin, an NGO focused on cryptocurrency adoption. The country’s Bitcoin strategy has shifted under its loan agreement with the International Monetary Fund (IMF), which requires repealing Bitcoin’s legal tender status and halting new Bitcoin purchases. This has created a vacuum in public education and state-led initiatives to promote adoption, leaving many citizens without access to tools or knowledge to use the technology effectively [1]. The IMF confirmed in a recent report that El Salvador has ceased accumulating Bitcoin since the agreement, contradicting prior claims by the country’s Bitcoin Office [1].

The government’s focus on accumulating Bitcoin for national reserves, rather than fostering public use, has drawn criticism for prioritizing political symbolism over practical economic benefits. Ehrenmann highlighted that while the state continues to hoard Bitcoin—a move he described as beneficial for government coffers—it offers little direct value to residents. The IMF loan terms also restrict the country from purchasing additional BTC, further limiting the program’s potential to stabilize or expand [1]. This shift has raised questions about the feasibility of using Bitcoin to reduce remittance costs or stimulate growth, two key goals of the original 2021 adoption law.

On-the-ground reports underscore limited integration of Bitcoin into daily life. A 2023 Cointelegraph investigation found that while some small businesses, such as hostels, experimented with Bitcoin payments via the Lightning Network—a second-layer solution enabling faster, cheaper transactions—widespread adoption remained hindered by a lack of public understanding. For instance, a hostel employee required guidance to process a Lightning Network payment for a stay, illustrating the educational gaps. Most Salvadorans continue to rely on traditional financial systems, with Bitcoin remaining a niche tool rather than a mainstream utility [1].

The rollback of public sector involvement in Bitcoin in January 2025, mandated by the IMF loan conditions, has intensified debates about the program’s viability. Critics argue that the government’s initial enthusiasm for Bitcoin was driven by political ambition rather than a concrete plan to improve financial inclusion. By removing legal tender status and halting new purchases, El Salvador has effectively abandoned its earlier vision. The absence of a coherent strategy to address barriers like education, infrastructure, and trust in the technology has left the initiative in limbo [1].

While the Lightning Network demonstrated potential for microtransactions, its success depends on user-friendly interfaces and widespread adoption—challenges the government has not addressed. The contrast between the state’s accumulation-focused approach and the needs of everyday users underscores a misalignment in priorities. For Bitcoin to serve as a viable alternative to traditional finance in El Salvador, sustained investment in education, infrastructure, and policy clarity will be essential. Without these, the country’s digital asset experiment risks remaining a symbolic gesture rather than a transformative tool for economic empowerment [1].

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[1] [Cointelegraph: El Salvador’s Bitcoin Reserve Fails to Help the People](https://cointelegraph.com/news/el-salvador-bitcoin-reserve-help-people)