In this post:
- El Salvador has increased its Bitcoin holdings by acquiring eleven more.
- Congress has been pressured by the IMF agreement to ban Bitcoin as El Salvador’s currency.
- In spite of pressure from the International Monetary Fund, El Salvador consistently accumulates Bitcoin.
On February 4, El Salvador increased its strategic reserve of Bitcoin by purchasing 11 more units. Previously, the nation bought one Bitcoin every day, but in recent years, it has increased its purchases.
El Salvador possesses 6067.18 Bitcoins, which are currently worth $616,049,642, according to the Nayib Bukele Bitcoin tracker. In the past seven days, the nation has bought over 20 Bitcoins.
El Salvador and the IMF reached an agreement to ban Bitcoin as legal money. Crypto enthusiasts have mixed opinions about the agreement with the IMF, with some believing it would undermine El Salvador’s progress as a South American crypto powerhouse.
Analysts thought the IMF agreement would guarantee the nation’s cryptocurrency activity would slow down, but that doesn’t appear to be the case.
As part of the $1.4 billion IMF deal, El Salvador had to make BTC payments voluntary, “confine” public sector involvement in the Bitcoin industry, and privatize the Chivo wallet.
The country acquired 11 BTC, valued at over $1 million, one day after signing the deal with the IMF.
The El Salvador Bitcoin Reserve has consistently elicited conflicting responses from international participants
There have been discussions on the El Salvador Bitcoin initiative on a number of different levels. Economic analysts and financial organizations laud the nation for its proactive approach to establishing El Salvador as a Bitcoin hub and its BTC adoption strategy.
Nonetheless, a number of analysts caution that the nation may experience inconveniences due to market volatility and the regulatory environment.
The impact of Bitcoin on financial stability worries the IMF and other institutions. Recent purchases, however, indicate that the nation is committed to acquiring cryptocurrency because of its possible benefits. Adoption of cryptocurrencies, according to the president, improves financial inclusion and economic diversification.
No one is certain of the long-term success of the continuing Bitcoin experiment in El Salvador. The accelerated purchases may be very productive for the country’s economy, or the market volatility may trigger serious drawbacks; only time will tell.
Even after lawmakers banned Bitcoin as legal cash, El Salvador has remained steadfast in its reserve policy.
According to a February 2 article in the Spanish newspaper El Pais, cryptocurrency fans are not encouraged by the most recent events. El Salvador would no longer be considered legal tender, according to the newspaper.
According to the article, a revised Bitcoin Act that was discussed and approved by the El Salvadorian congress nullified Bitcoin as legal cash. According to the article, the International Monetary Fund (IMF) exerted pressure on the country to reach an agreement in order to secure a $1.4 billion loan.
According to the recently passed Bitcoin Act, BTC is not accepted as money in the nation. It does not, however, restrict business owners who are at ease and prepared to transact in it.
BTC is now voluntary, and no one can be forced to accept it as a form of payment. Alternatively, two parties can use the crypto as a payment tool if both of them agree to use it as a mode of payment. Alongside the payment option, it cannot be used to pay taxes.
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