El Salvador Expands Bitcoin Purchases Despite IMF Deal

The head of El Salvador’s National Bitcoin Office, Stacy Herbert, stated that the country will continue to purchase the leading cryptocurrency, potentially at an “accelerated pace.”

??EL SALVADOR SECURES $3.5 FUNDING DEAL

➡️Bitcoin remains legal tender
➡️El Salvador will continue buying bitcoin (at possibly an accelerated pace) for its Strategic Bitcoin Reserve
➡️Bitcoin capital markets will continue to be built; for example, the recent tokenized issuance…

— Stacy Herbert ??? (@stacyherbert) December 19, 2024

On December 18, the IMF announced an agreement with the Latin American country for a $1.4 billion loan. With additional funding from regional development banks, the total amount could exceed $3.5 billion.

The deal requires approval from the IMF Board. As part of the agreement, El Salvador committed to adjusting its bitcoin strategy, including:

• the government’s withdrawal of support for the Chivo wallet;
• accepting taxes only in US dollars;
• limiting digital gold transactions for the public sector;
• voluntary acceptance of cryptocurrency payments for private entities.

Herbert assured that bitcoin will remain legal tender in the country alongside the dollar.

She noted that the country will continue to develop capital markets based on cryptocurrency, such as the recent issuance of tokenized US government bonds. The assets were issued on the Liquid Network sidechain in collaboration with NexBridge.

Educational bitcoin initiatives for schoolchildren, students, and civil servants will be further developed, Herbert added. In January, Little HODLer workbooks will be released for elementary school students.

Training for developers of the first cryptocurrency’s blockchain and the Lightning Network micropayment system will continue under the CUBO+ program.

“The Chivo wallet will be sold or closed, but numerous private bitcoin applications will continue to serve El Salvador,” Herbert stated.

According to a decision previously made by President Nayib Bukele, the authorities purchased 1 BTC daily for the strategic fund. However, on December 20, El Salvador acquired 11 BTC at once, according to data from the bitcoin office.

The country’s cryptocurrency reserves have reached 5980.8 BTC. At the time of writing, the assets are valued at approximately $560 million.

The digital gold quotes continued their correction on December 20, falling below the $100,000 level.

The price decline began after the Fed decided on December 18 to lower the key rate range by 25 basis points, to 4.25-4.5% per annum.

An additional driver was a statement by the head of the regulator, Jerome Powell. During a press conference, he indicated that the central bank is not interested in creating a strategic bitcoin reserve in the country.

In December, US President-elect Donald Trump confirmed an initiative he proposed during his electoral campaign. It has gained support in the Senate and at the state level.

Calls for the formation of bitcoin reserves have already been made in the Russian State Duma and the European Parliament.