IMF Pushes El Salvador To Narrow Bitcoin Law For Funding

   SAN SALVADOR, EL SALVADOR - JUNE 1: In this handout picture provided by the Salvadoran presidency, ... [+] President of El Salvador Nayib Bukele takes oath of office during the 'Inauguration Day ' at Palacio Nacional on June 1, 2024 in San Salvador, El Salvador. Nayib Bukele won the presidential election on February 4 giving him a second consecutive term in office from 2024 to 2029. (Photo by Handout/Getty Images) Getty Images The International Monetary Fund stated that if El Salvador doesn’t get rid of its Bitcoin Bitcoin law, which made bitcoin legal tender in the country, it should at least “narrow the scope” of the regulation to receive the resources from the fund it seeks. El Salvador made bitcoin legal tender in 2021, and since that moment, the IMF has been criticizing and opposing this decision. Now, they come with a different approach: equally against bitcoin but with a less challenging claim. “What we have recommended is a narrowing of the scope of the Bitcoin law, strengthening the regulatory framework and oversight of the Bitcoin ecosystem and limiting the public sector exposure to bitcoin,” the IMF’s Director of Communications Department Julie Kozack explained in a press briefing on October 3. The Central American country not only declared bitcoin legal tender but also created regulations regarding digital assets in general, and have been accumulating bitcoin. Right now, El Salvador sits on 5,892.76 BTC, adding 1 BTC daily to its treasury as a public policy since November 2022; President Nayib Bukele announced this strategy through his X account. Even being an important demand from the IMF, the new comments underscore the shift in the fund’s narrative. In 2021, its representatives called for the full abolition of the law. The idea is that the country should limit the influence of bitcoin, especially in the public sector, as Kozack stated. That’s a change. Read More: Venezuelans Use Crypto To Resist Maduro’s Post-Election Repression “Bitcoin is a mimetic money machine. If the IMF and the other fiat supranationals do not accumulate a stash, they will go extinct,” said the Bitcoin analyst and Adamant Research founder Tuur Demeester through his X account, implying that, in the end, organizations like the IMF might be forced to accumulate Bitcoin. Despite looking for resources, El Salvador’s president announced that the national budget 2025 won’t include the issuance of new debt, so they may be prepared for not receiving new funds from the IMF. The conversations continue, and now it’s time for the El Salvador administration to choose if they prefer the fund way or keep on track with their Bitcoin strategy. The country has been exploring the possibility of issuing bonds related to Bitcoin, known as the Volcano Bonds, since 2021, so there are alternatives to finance the funding needed. We contacted several organizations related to the El Salvador government but had yet to receive an answer by the time of this publication.