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El Salvador, the initial nation to legalize Bitcoin as legal tender, has been said to have suspended its daily Bitcoin buys. The government’s wallet last made a purchase on February 17, 2025. This suspension comes at a time when the country secured a $1.4 billion loan deal with the International Monetary Fund (IMF), with many wondering if financial obligations have affected the government’s position regarding Bitcoin.
Why Did El Salvador Stop Buying Bitcoin?
In November 2022, Nayib Bukele, the President, revealed a proposal to purchase 1 Bitcoin every day in order to bolster the nation’s reserves. Nevertheless, recent news indicates that this policy has been halted. Though no formal announcement has officially connected the IMF loan to the suspension of Bitcoin buying, financial experts opine that the deal might have included incentives against excessive exposure to Bitcoins.
IMF’s Influence on El Salvador’s Bitcoin Policies
The IMF has repeatedly denounced El Salvador’s use of Bitcoin, arguing it poses financial risks and regulatory issues. The $1.4 billion loan agreement may represent a compromise, with the government reducing its Bitcoin role to meet international financial standards.
Past IMF talks have called on El Salvador to:
Decrease the role of Bitcoin in public finances
Enhance financial transparency
Bolster traditional banking regulations
What’s Next for El Salvador’s Bitcoin Strategy?
Notwithstanding the suspension in buying, El Salvador continues to maintain more than 2,800 BTC within its national coffers. It also continues running the Bitcoin treasury and the Volcano Bond project, which sees infrastructure projects funded by Bitcoin-denominated bonds.
Whether this stoppage is momentary or definitive is unclear at this point in time. Whatever the case may be, though, the step underscores the delicate dance between the Bitcoin aspirations of El Salvador and international financial headwinds.
What’s your opinion? Is El Salvador backpedaling on its Bitcoin experiment, or is it just a breather? Leave your thoughts below!
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