The $ 1.4 billion financing agreement between El Salvador and International Monetary Fund (IMF), Bitcoin in the country’s public sector $83,958.40 aims to impose important restrictions on. The conditions set by the IMF include preventing the public sector from accumulating Bitcoin and limiting the use of Bitcoin in borrowing tools. Authorities say that these regulations will increase economic transparency and reduce risks.
The restrictions imposed by the IMF agreement
According to the IMF’s technical agreement report, El Salvador will not be allowed to voluntarily accumulate public institutions. In addition, the export of borrowing instruments indexed to Bitcoin or Bitcoin will be prevented. The IMF states that these regulations will contribute to the control of the national economy and to minimize risks.
These restrictions require significant change in El Salvador’s Bitcoin strategy. The country, which accepted Bitcoin as an official currency in 2021, had to step back in this policy in exchange for financing support of the IMF. The IMF states that it is a priority target to provide financial stability and keep public debt at a sustainable level. Authorities announced that the use of Bitcoin will be voluntary, that the public sector will not be directly involved in Bitcoin projects and tax payments will be made only by US dollar.
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Explanations and future plans from the authorities
Méndez Bertolo, one of the government officials of El Salvador, said that the expanded financing program with the IMF aims to increase economic transparency and strengthen public administration. According to Bertolo, this agreement will facilitate the country’s additional financial support from international organizations.
Authorities clarified that Bitcoin was removed from the official money status with the amendments made in the Bitcoin Law. However, the individual use of Bitcoin in the country is not completely prohibited. Instead, only the public sector’s activities related to Bitcoin have been limited. The private sector and individual investors will be able to continue to use Bitcoin.
The IMF will closely follow the arrangements in El Salvador. Authorities think that the decisions taken will help the economy on a more solid basis. With the withdrawal of the public sector from Bitcoin projects, the country’s financial system is expected to provide more transparency.
Responsibility Rejection: The information contained in this article does not contain investment advice. Investors should be aware that crypto currencies carry high volatility and thus risk and carry out their operations in line with their own research.
