- El Salvador secures a $1.4 billion loan deal with the IMF to reduce international debt
- The agreement required concessions, including optional crypto acceptance for private-sector payments
- The government will gradually reduce its involvement in the development of the El Chivo crypto wallet
El Salvador recently reached a deal with the International Monetary Fund (IMF) that’ll allow the nation to receive over $1.4 billion in loans. The agreement is set to be distributed in a 40-month period and will help El Salvador to reduce its international debt.
This development holds significant weight to the cryptocurrency market as—for the longest time—El Salvador’s pro-crypto stance was seen as an impediment by the IMF. In 2021, the nation under President Nayib Bukele adopted a heavy cryptocurrency adoption stance.
El Salvador began buying Bitcoin on a daily basis and became the first to adopt the currency as legal tender back in 2021. While that ultimately proved a significant step forward for the nation’s finances—attaching its reserves to a volatile asset made it harder for El Salvador to obtain IMF loans.
However, in order to reach this agreement President Bukele also had to reach certain concessions in regard to its digital assets plans. The government agreed to allow the private sector to choose whether or not to accept cryptocurrency for payments, and its involvement in the development of El Salvador’s crypto wallet El Chivo will be “gradually unwound”—according to the IMF.
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