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El Salvador's Bitcoin Law Amended: Balancing IMF Concerns and Crypto Commitment

Coin WorldThursday, Jan 30, 2025 6:23 am ET

1min read

El Salvador's Congress has swiftly amended the country's Bitcoin law, securing its legal tender status while complying with International Monetary Fund (IMF) requirements. The changes, approved within minutes of being presented, aim to address IMF concerns while maintaining El Salvador's commitment to cryptocurrency.

The new amendments remove the mandatory acceptance of Bitcoin as payment by businesses, making its use voluntary in the private sector. Tax payments will now be restricted to U.S. dollars, addressing one of the IMF's main concerns about the country's crypto exposure. The reforms passed with 55 votes in favor and only two against, demonstrating the ruling party's control over the legislative process.

Despite these modifications, El Salvador maintains its position as a leading crypto-friendly nation. The country currently holds 6,049 Bitcoin, valued at approximately $633 million, representing an unrealized profit of 127% on its investment. The government has shown no signs of slowing its Bitcoin accumulation strategy, recently purchasing 11 Bitcoin valued at over $1 million and adding another 12 Bitcoin on January 21, 2025.

El Salvador's commitment to cryptocurrency infrastructure remains strong. The government has installed more than 200 Bitcoin ATMs throughout the country, making it one of the most accessible regions for Bitcoin transactions globally. The nation continues to develop innovative crypto projects, such as Volcano Energy, a Bitcoin mining operation that harnesses renewable energy from volcanic sources, and the Volcano Bonds program, which aims to fund infrastructure projects and develop Bitcoin City, a planned tax-free crypto hub powered by geothermal energy.

In a move that reinforces El Salvador's position as a crypto hub, Tether Group announced plans to relocate its entire operations to the country. This decision followed Bitfinex Derivatives, its Seychelles-based affiliate, securing a Digital Asset Service Provider license in El Salvador.

The relationship between El Salvador and traditional financial institutions has been complex. The country had previously faced challenges accessing conventional financial markets due to its high debt and unconventional Bitcoin experiment, making the IMF deal a crucial development. President Bukele has maintained his characteristic bold approach to cryptocurrency advocacy, recently responding to news about former Senator Bob Menendez's bribery conviction by pointing out the irony of Menendez's past criticism of El Salvador's Bitcoin adoption.

The government's Bitcoin strategy has evolved since September 6,

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