El Salvador to Scale Back Bitcoin Policy in Exchange for $1.3 Billion IMF Loan

El Salvador, which made headlines by becoming the first country to adopt Bitcoin as legal tender, is now reconsidering its stance on the cryptocurrency.

The nation is currently in discussions with the International Monetary Fund (IMF) to secure a $1.3 billion loan, with the deal expected to be finalized within the next two to three weeks. As part of the agreement, El Salvador is set to scale back its commitment to Bitcoin , a move that marks a significant shift in its cryptocurrency policy.

Sources familiar with the negotiations revealed that an IMF mission has already arrived in San Salvador to work out the final details of the loan arrangement with President Nayib Bukele’s government.

One of the key provisions of the agreement is the removal of the mandatory requirement for businesses to accept Bitcoin as a payment method. Instead, businesses would have the option to accept Bitcoin voluntarily, rather than being compelled to do so.

The IMF has been critical of El Salvador’s decision to adopt Bitcoin, citing potential risks to financial stability and the integrity of the country’s financial system. The global financial institution had previously urged the government to reconsider its approach, calling for Bitcoin to be removed as legal tender.

With this new agreement, El Salvador appears to be making concessions to the IMF in order to secure much-needed financial support, while still maintaining some level of engagement with the cryptocurrency.