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El Salvador’s Commitment to Bitcoin Remains Unwavering Amid IMF Restrictions
As El Salvador celebrates the festive holiday season, the country’s dedication to Bitcoin is on full display. A Bitcoin-themed Christmas tree has become a symbol of the nation’s enduring commitment to the original cryptocurrency. This display of support comes shortly after El Salvador acquired 11 Bitcoin (BTC) valued at over $1 million on December 19, 2024.
Defying Criticism and IMF Restrictions
The purchase of additional Bitcoin demonstrates El Salvador’s bold strategy despite criticism from traditional financial institutions and economists. These critics have expressed concerns over the risks associated with Bitcoin‘s volatility and its potential impact on the country’s financial stability.
El Salvador made history in September 2021 by becoming the first nation to accept Bitcoin as legal tender. This decision signaled a significant shift in the nation’s stance on cryptocurrencies. Since then, Bitcoin has played a major role in El Salvador’s financial landscape, from government-backed BTC ATMs to its growing use in enterprises.
IMF Loan Conditions and Their Impact
The recent $1.4 billion International Monetary Fund (IMF) loan, signed on December 18, 2024, imposed conditions on El Salvador’s financial strategy. The terms of the loan include a ban on cryptocurrency transactions, and companies are no longer obligated to accept Bitcoin. Furthermore, taxes can only be paid in US dollars. The IMF has also ordered the government to discontinue the use of the state-backed Chivo wallet, which was introduced in 2021 as part of El Salvador’s initiative to incorporate Bitcoin into the country’s financial system.
IMF loans often come with conditions that directly impact a country’s financial and economic decisions. These requirements aim to ensure financial restraint and conformity to global financial norms, which may lead to a loss of financial sovereignty.
El Salvador’s Unwavering Commitment to Bitcoin
Despite the IMF’s restrictions, El Salvador’s government remains committed to its long-term Bitcoin strategy. The National Bitcoin Office reaffirmed its dedication to the plan, stating that no Bitcoin from the country’s reserves will be sold.
El Salvador currently holds 5,995 Bitcoin, valued at around $569.5 million. The recent acquisition of 11 Bitcoin brings the country’s total reserves close to 6,000 BTC. The average purchasing price per Bitcoin is approximately $97,000.
Key statistics from El Salvador’s Bitcoin portfolio include:
- Total Bitcoin Holdings: Over $572 million, or around 5,995 BTC
- Impact of Bitcoin Price: A recent decline of $6.08 million, equivalent to a small decline of $1.02K per BTC
The balance history graph shows a steady upward trend in the value of the reserves, demonstrating long-term growth despite temporary fluctuations.
El Salvador’s commitment to Bitcoin is a testament to the country’s support for the cryptocurrency sector and its potential to promote financial independence. Despite facing obstacles, including pressure from the IMF, El Salvador remains resolute in its stance on cryptocurrencies.
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