El Salvador’s Legislative Assembly has passed a bill to amend and possibly reduce the country’s Bitcoin adoption strategy to meet the conditions of a $1.4 billion agreement with the International Monetary Fund (IMF).
According to Reuters, the country’s Congress approved the bill with 55 votes in favor and two against, just minutes after President, Nayib Bukele, submitted it to the assembly. The bill modifies regulations, making the private sector’s acceptance of cryptocurrencies like Bitcoin voluntary rather than mandatory.
The move comes after El Salvador secured a $1.4 billion loan agreement with the IMF in December 2024 to support its reform agenda and address balance of payments challenges. The 40-month fund facility is expected to provide the country with approximately $3.5 billion.
As part of the agreement, El Salvador committed to restricting certain Bitcoin-related activities, including making Bitcoin acceptance optional for the private sector – a measure outlined in the recently approved bill, according to Reuters.
In early 2023, as reported by BitKE, the IMF advised countries not to grant crypto assets official currency or legal tender status as part of a 9-point framework to deal with cryptocurrencies. Directors generally agreed that crypto assets should not be granted official currency or legal tender status in order to safeguard monetary sovereignty and stability, the IMF said.
IMF Asks Countries Not to Grant Cryptocurrencies Legal Tender Status
As part of the policy response, the following 9 points are recommended:https://t.co/S4Bz9UZVeV @IMFNews pic.twitter.com/YlTXur8DX6
— BitKE (@BitcoinKE) March 6, 2023
Under the agreement, IMF stated:
“The potential risks of the Bitcoin project will be diminished significantly in line with Fund policies. Legal reforms will make acceptance of Bitcoin by the private sector voluntary.
For the public sector, engagement in Bitcoin-related economic activities and transactions in and purchases of Bitcoin will be confined.”
In 2021, BitKE reported that El Salvador had become the first country to officially adopt Bitcoin as legal tender, aiming to enhance financial inclusion following President Bukele’s proposal.
[WATCH] I Want to Make #Bitcoin a Legal Tender, Announces President, El Salvador: https://t.co/Mce8s5Oldb 🇸🇻
— BitKE (@BitcoinKE) June 6, 2021
His government also embraced Bitcoin as a reserve asset and currently holds 6,067 BTC, valued at approximately $637.1 million, according to Arkham Intelligence.
The country also launched a national digital wallet named Chivo. However, the IMF said that the government’s involvement with the crypto e-wallet (Chivo) would be gradually phased out.
That said, El Salvador has continued its Bitcoin purchasing spree. According to Bitcoin Magazine, on February 4 2025, El Salvador bought 11 more Bitcoins. The additional purchase by El Salvador amounts to $1.1 million.
With this purchase, El Salvador’s Bitcoin holdings have surpassed 6,067.
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