El Salvador to Scale Back Bitcoin Programme to Reach $1.3 Billion IMF Loan Deal

El Salvador is expected to reach an agreement with the International Monetary Fund on a $1.3bn loan programme in the next two to three weeks to spearhead reforms to support the use of bitcoin as legal tender and cut the deficit, according to the Financial Times, citing two people close to the negotiations. An International Monetary Fund (IMF) mission has arrived in San Salvador to finalise the details of the deal with the government of President Naib Buclé. Sources close to the matter said the deal is expected to secure another $1bn in loans from the World Bank and Inter-American Development Bank over the next few years.

The IMF has opposed El Salvador's adoption of digital currencies, citing risks to financial stability and integrity, and has urged the Bukele government to stop accepting cryptocurrencies as legal tender. Under the terms of the agreement finalised with the Washington-based fund, El Salvador will remove legal requirements for businesses to accept Bitcoin as a payment method.