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El Salvador made headlines again with a $1 million Bitcoin purchase days after signing a $1.4 billion financing agreement with the International Monetary Fund. The deal includes new restrictions on the nation’s cryptocurrency transactions and policies.
IMF Deal Pushes El Salvador to Modify Bitcoin Strategy
A day after reaching a $1.4 billion agreement with the International Monetary Fund that limited its dealings with Bitcoin, El Salvador purchased $1 million worth of the cryptocurrency.
The National Bitcoin Office of the country announced in a statement on Dec. 19 that it had "transferred over a million dollars worth of Bitcoin to our Strategic Bitcoin Reserve," and according to their website, they had added 11 Bitcoin to their holdings.
The decision ended the country's "one Bitcoin per day" streak that President Nayib Bukele had proclaimed in November 2022 and increased the country's holdings to 5,980.77 BTC, which is equivalent to around $580 million at the current price of $97,000 per Bitcoin.
El Salvador "will continue buying Bitcoin (at possibly an accelerated pace)," according to Stacy Herbert, director of the National Bitcoin Office, in a post on December 19th.
Bitcoin Purchases Continue Despite IMF Restrictions
In order to obtain $1.4 billion over the course of 40 months from the global lender, Bukele's administration was urged to wind down some of its Bitcoin activities as part of a finance arrangement that was made with the IMF on December 18.
Part of the agreement, according to the IMF, was for El Salvador's government to "be confined" in its Bitcoin activities, transactions, and acquisitions.
In addition, the government has committed to withdrawing its support for the Chivo cryptocurrency wallet, allowing tax payments exclusively in US dollars, and making Bitcoin use in the private sector optional.
At the time, a representative from the Bitcoin Office assured Cointelegraph that the organization "will keep buying one Bitcoin a day (likely even more in the future), and we will not sell any of our current holdings." The representative also stated that "Bitcoin continues to be our main strategy."
El Salvador Maintains Bitcoin as Legal Tender
El Salvador was the pioneer in recognising Bitcoin as legal money in September 2021.
Herbert said that Bitcoin will continue to function as legal money. Private Bitcoin wallets, she said, would "continue serving El Salvador," while the government-issued Chivo wallet "will be sold or wound down."
There has been a tense four years of negotiations stemming from Bukele's Bitcoin policies, which the IMF claimed endangered the country. The settlement with the country is still pending approval by the IMF Executive Board.
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