IMF Demands El Salvador Prohibit Bitcoin Accumulation in the Public Sector
The International Monetary Fund (IMF) has called for new restrictions on Bitcoin purchases by El Salvador’s public sector as part of an expanded $1.4 billion financing agreement with the country.
On March 3, the IMF issued a new request under this agreement, presenting several documents, including an update to the staff statement and a statement by the executive director for El Salvador.
One of the key points in the technical memorandum of understanding mandates a ban on the voluntary accumulation of Bitcoin by the public sector. Additionally, the document requires the government to restrict the issuance of debt or tokenized instruments indexed or denominated in Bitcoin that could represent a liability for the public sector.
IMF: “Risks Related to Bitcoin Are Being Mitigated”
In an accompanying statement on February 26, Méndez Bertolo, IMF Executive Director for El Salvador, explained that the agreement aims to enhance governance, transparency, and economic resilience to boost confidence and growth in the country.
“For their part, the risks related to Bitcoin are being mitigated,” Bertolo stated.
He also noted that Salvadoran authorities have introduced amendments to the Bitcoin Law, which:
- Clarify the legal status of Bitcoin
- Remove essential characteristics of legal tender
- Make Bitcoin acceptance voluntary
- Ensure that taxes are paid in U.S. dollars
- Limit the public sector’s participation in the Bitcoin project
Bertolo further mentioned that the program is expected to attract significant financial support from the World Bank, the Inter-American Development Bank, and other regional development banks.