El Salvador President Nayib Bukele came up with a bold statement that the country will not stop buying Bitcoin despite its pact with the International Monetary Fund (IMF) to scale back all its Bitcoin activities. In late December, El Salvador and IMF reached an agreement to limit all their Bitcoin-related activities in exchange for a total financing package worth over $3.5 billion.
El Salvador President Has Decided to Keep Purchasing BTC Regardless of the IMF Demands!
Nayib Bukele, the president of El Salvador has posted on X that the country will continue to buy Bitcoin and engage in Bitcoin-related activities even though they have an agreement with IMF, for not taking part in any activities associated with Bitcoin. Bukele’s statement came up right after El Salvador purchased five Bitcoins today, he reinforced the country’s stand in adding Bitcoin to the reserve despite the existing restriction from the IMF. IMF already stated that they had banned El Salvador’s public sector from voluntarily accumulating Bitcoin as part of the modified loan scheme between the two parties. According to the latest information, El Salvador currently holds 6,101 Bitcoin and this could be worth $534.5 million.
“This all stops in April.” “This all stops in June.” “This all stops in December. No, it’s not stopping. If it didn’t stop when the world ostracized us and most “Bitcoiners” abandoned us, it won’t stop now, and it won’t stop in the future. Proof of work > proof of whining. Nayib Bukele wrote on X (Previously Twitter).
El Salvador previously agreed to amend their existing Bitcoin accumulation laws, but Bukele’s recent approach to this issue implies the opposite. El Salvador reportedly consented to withdraw their Bitcoin accumulation strategy so they could get a loan worth $1.4 billion, with a total package that could be worth around $3.5 billion. The recent breach in the previously agreed pact could lead to further concerns and problematic scenarios. Samson Mow, an influential community figure, stated that if there was a loophole for continued buying, he had not found it in the document. He expressed that if the plan was to outright defy the International Monetary Fund (IMF), he did not think that would be beneficial for securing additional loans or for presenting an image of a serious and stable country. Samson Mow has been following and studying the agreement between the IMF and El Salvador for a long period of time.
El Salvador’s New Bitcoin Accumulation Strategy and IMF Agreement
In 2021, El Salvador implemented their Bitcoin accumulation strategy and started it with the acquisition of 400 BTC. Nayib Bukele announced that as part of their new strategy, they would purchase one bitcoin per day from November 2021. This novel strategy from El Salvador incited mixed reactions from international financial institutions and led to concerns over potential risks associated with the volatility of Bitcoin. After a series of events, IMF Managing Director Kristalina Georgieva officially confirmed that El Salvador’s authorities have agreed to stop acquiring BTC and are ready to drop their new Bitcoin accumulation strategy. IMF Deputy Managing Director and Acting Chair Nigel Clarke emphasized this by stating that going forward, program commitments would confine government engagement in Bitcoin-related economic activities, as well as government transactions in and purchases of Bitcoin.
The IMF recently issued an updated request on March 3 for a modified arrangement under its $1.4 billion loan to El Salvador. As part of the modified agreement between IMF and El Salvador, the IMF aims to restrict El Salvador from further Bitcoin purchases. Méndez Bertolo, the fund’s executive director for El Salvador, stated that the IMF’s extended fund facility for El Salvador aims to provide improvements in governance, transparency, and resilience to boost confidence and the country’s growth potential. He added that, meanwhile, Bitcoin-related risks were being mitigated. He also stated that the authorities had enacted amendments to the Bitcoin Law that clarified the legal nature of Bitcoin and removed the essential features of legal tender from the law. He mentioned that acceptance of Bitcoin would be voluntary, tax payments would be made in US dollars, and the role of the public sector in the Bitcoin project would be confined.
