El Salvador Gets $1.4B IMF Loan, Will Sell Chivo Wallet, Continue Buying Bitcoin

Dec 19, 2024, 03:14 PM

El Salvador has reached a staff-level agreement with the International Monetary Fund (IMF) on a $1.4 billion loan deal, potentially unlocking up to $3.5 billion in total financing over 40 months. This agreement comes after four years of negotiations strained by El Salvador's adoption of Bitcoin as legal tender in 2021. Under the deal, El Salvador will scale back its Bitcoin policies by making Bitcoin acceptance by merchants voluntary, phasing out or selling its government-backed Chivo wallet, and ensuring taxes are paid exclusively in US dollars. Despite these concessions, Bitcoin will remain legal tender in the country, and the government plans to continue purchasing Bitcoin, possibly at an accelerated pace, for its strategic reserves. Recently, El Salvador added 11 Bitcoins, worth over $1 million, to its strategic Bitcoin reserve, reaffirming its commitment to a long-term Bitcoin vision.