El Salvador concludes a $1.4 billion deal with the International Monetary Fund after scaling back its Bitcoin policies
El Salvador has struck a $1.4bn (£1.1bn) loan deal with the International Monetary Fund (IMF) after agreeing to scale back its controversial Bitcoin policies.
The global lender said the risks related to the adoption of the world’s largest cryptocurrency have now eased as companies will be allowed to decide whether to accept bitcoin or not.
In 2021, it became El Salvador The first country in the world to make Bitcoin a legal currency.
This week, the cryptocurrency briefly reached a new record high of over $108,000.
“The potential risks of the Bitcoin project will be significantly reduced in line with the Fund’s policies,” the IMF announcement said.
“Legal reforms will make private sector acceptance of Bitcoin voluntary. For the public sector, participation in economic activities and transactions related to Bitcoin and its purchases will be restricted.”
The deal, which aims to help support El Salvador’s economy, still needs approval from the Executive Board of the International Monetary Fund.
the The International Monetary Fund opposed Salvadoran President Nayib Bukele’s crypto-friendly policies, warning that they could become an obstacle to providing financial aid.
However, Bukele celebrated on social media as Bitcoin surged after Donald Trump won the US election in November.
Earlier this month, when Bitcoin surpassed $100,000 for the first time, Bukele said he said in a social media post His country’s cryptocurrency holdings have more than doubled in value.
He also blamed his political opponents for causing many Salvadorans to miss out on Bitcoin’s rise.
The cryptocurrency has been on the rise since Donald Trump won the election on November 5.
The incoming Trump administration is seen as more friendly towards cryptocurrencies than the White House under President Joe Biden.
The cryptocurrency fell on Thursday along with global stock markets after the US Federal Reserve signaled a slowdown in the pace of interest rate cuts next year.
Bitcoin is currently trading at around $100,000.