- El Salvador makes Bitcoin adoption voluntary after IMF pressure on private sector use.
- Local Bitcoin usage remains low, with only 7.5% of the population using it for transactions.
- El Salvador continues to buy Bitcoin, holding over 6,000 BTC worth $636 million.
El Salvador has amended its Bitcoin law to make cryptocurrency adoption optional, bowing to pressure from the International Monetary Fund (IMF). The country’s Congress passed the new law on Wednesday, following a request from President Nayib Bukele.
El Salvador passed a law in 2021 recognizing Bitcoin as legal tender alongside the U.S. dollar, a move that Bukele issued into law and described as a move toward financial inclusion and economic growth. However, the expected boom in Bitcoin adoption never materialized.
Local adoption, however, remains dismal, with only 7.5% of the local population using the asset daily, according to a report by Reuters. A government-run Chivo wallet that was supposed to be the primary mechanism for handling Bitcoin transactions overwhelmed the market.
However, the IMF, which agreed to lend El Salvador $1.4 billion in December 2024, recommended that Bitcoin be voluntary for private-sector transactions. This advice prompted the recent amendment to the Bitcoin law, allowing businesses and individuals to choose whether or not to accept Bitcoin as payment.
Related: El Salvador Trades Bitcoin Freedom for $1.4B IMF Lifeline
Congress approved the law, with 55 votes in favor and just two against. Ruling party lawmaker Elisa Rosales described the reform as necessary to ensure Bitcoin’s “permanence as legal tender” while improving its “practical implementation” in the country.
El Salvador’s Continued Bitcoin Purchases
Despite the shift in policy concerning Bitcoin acceptance, El Salvador remains committed to expanding its Bitcoin reserves. On January 19, the country’s National Bitcoin Office announced the purchase of 11 BTC, worth over $1 million, for its Strategic Bitcoin Reserve.
This followed a similar purchase of 1 BTC on January 20 for $106,000. Based on the current price of Bitcoin, El Salvador currently holds 6,049 BTC, which is valued at approximately $636 million.
During the time of writing, Bitcoin was trading at $105,229.07, with an increase of 2.59% over the previous day. Additionally, the market cap has risen to $2.08 trillion, an increase of 2.58% over the same period.
Related: El Salvador Scales Back Bitcoin Adoption Under IMF Loan Terms
During the time of writing, Bitcoin was trading at $105,229.07, with an increase of 2.59% over the previous day. Additionally, the market cap has risen to $2.08 trillion, an increase of 2.58% over the same period.
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