El Salvador Buys 11 Bitcoin A Day After IMF Urges Scaling Back

Highlights:

• El Salvador boosts Bitcoin reserves to 5,980 BTC with a $1 million purchase.
• A New IMF agreement limits public-sector Bitcoin use while making it optional for the private sector.
• Stacy Herbert confirms El Salvador will continue buying Bitcoin and shaping policies.

El Salvador has boosted its Bitcoin reserve by purchasing 11 Bitcoins for $1 million, bringing its total holdings to 5,969, valued at $579 million. This investment follows the country’s recent $1.4 billion agreement with the International Monetary Fund (IMF).

The new agreement makes Bitcoin acceptance optional for the private sector while limiting the public sector’s involvement in crypto activities. Taxes will only be accepted in US dollars, further restricting Bitcoin’s official use. The government will also gradually scale back its role in the Chivo digital wallet program. The IMF stated that the potential risks of the Bitcoin project will be significantly reduced, in line with Fund policies.

On Thursday, Stacy Herbert, director of El Salvador’s National Bitcoin Office, announced on X that the country will continue buying Bitcoin for its strategic reserve. She also mentioned that the office would keep shaping Bitcoin policies. Additionally, it will create roadmaps, attract investors, and launch educational programs.

The CUBO+ program will graduate 20+ Bitcoin developers by January next year. Mi Primer Bitcoin and Node Nation continue in Salvadoran high schools. Meanwhile, 80,000 civil servants are getting Bitcoin-certified through ESIAP.

🇸🇻EL SALVADOR SECURES $3.5 FUNDING DEAL

➡️Bitcoin remains legal tender
➡️El Salvador will continue buying bitcoin (at possibly an accelerated pace) for its Strategic Bitcoin Reserve
➡️Bitcoin capital markets will continue to be built; for example, the recent tokenized issuance…

— Stacy Herbert 🇸🇻🚀 (@stacyherbert) December 19, 2024

Herbert Confirms Bitcoin Will Remain Legal Tender in El Salvador

In September 2021, El Salvador became the first to adopt BTC as a legal tender. Despite warnings from the International Monetary Fund, it adopted Bitcoin alongside the U.S. dollar. Since then, the country has acquired Bitcoin through various methods, including purchases and mining. Additionally, the nation has generated revenue from Bitcoin-related initiatives.

Herbert stated that it will remain legal tender. She also mentioned that the government-issued Chivo wallet “will be sold or wound down.” Additionally, she expected private-sector Bitcoin wallets to “continue serving El Salvador.”

The country has bought one Bitcoin per day since 2022. President Nayib Bukele has said the government will continue buying Bitcoin until it becomes too expensive in fiat currencies.

IMF Continues to Urge El Salvador to Move Away from Bitcoin

Since adopting BTC as a legal tender, the IMF has urged the country to move away from Bitcoin and recommended adopting traditional financial infrastructure. In November 2021, the IMF said Bitcoin should not be used as a legal tender in El Salvador. It also called for stronger regulation of cryptocurrency ecosystems in Central America. This recommendation was reiterated in January 2022. 

In August, the IMF raised concerns. They noted that while risks haven’t appeared, more actions are needed. Moreover, in a press conference on October 3, IMF communications director Julie Kozack emphasized the need to narrow Bitcoin law. She also called for improved regulation and reduced public sector exposure to Bitcoin.