The International Monetary Fund (IMF) has agreed to issue a $1.4 billion loan facility to the government of El Salvador, but there are some conditions attached related to Central America's Bitcoin (BTC) and virtual currency adoption policy. are.
The cash will support El Salvador's reform agenda and is subject to approval by the IMF's Board of Directors, according to a new press release from the United Nations (UN) financial institution.
The IMF also said the facility is expected to “facilitate” loans totaling $3.5 billion from the World Bank and various other international financial institutions.
The United Nations financial institution notes that the Salvadoran government has agreed to limit its efforts in cryptocurrencies as part of the agreement.
“The potential risks of Bitcoin projects will be significantly reduced in accordance with the Fund's policies. The legal changes will make the acceptance of Bitcoin by the private sector voluntary. For the public sector, Bitcoin-related economic activities will be Involvement in, trading and purchasing Bitcoin Taxes will only be paid in US dollars, and government participation in crypto electronic wallets (Chivo) will be gradually lifted. Transparency, regulation and supervision of digital assets will be strengthened. Stability, consumer and investor protection, and financial integrity will be ensured.”
However, Stacey Herbert, director of El Salvador's Bitcoin Office, said El Salvador has no plans to slow down its Bitcoin purchases.
“Bitcoin remains a fiat currency. El Salvador will continue to purchase Bitcoin (likely at an accelerated pace) as a strategic Bitcoin reserve.”
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