El Salvador Adjusts Bitcoin Policy to Secure $1.3B IMF Loan: Report
El Salvador is reportedly preparing to limit the reach of its Bitcoin legislation in order to secure a $1.3 billion financing package from the International Monetary Fund (IMF). According to sources cited by the Financial Times on Monday, the Central American nation and the IMF are nearing an agreement that would ease the country’s legal tender rules on Bitcoin and address fiscal challenges.
Under the emerging terms, El Salvador’s government would drop the current mandate that requires all businesses to accept Bitcoin as a form of payment. Instead, companies could choose whether to use the cryptocurrency. In addition, the government would commit to shrinking its budget deficit by 3.5% of the nation’s gross domestic product over the next three years, tapping both cost-cutting measures and revenue increases. Another key element of the proposed deal involves bolstering the country’s financial reserves from $11 billion to $15 billion.
If finalized, the agreement could be reached within two or three weeks and may unlock an additional $2 billion in funding from the World Bank and the Inter-American Development Bank in the coming years, sources familiar with the discussions said.
The IMF has consistently voiced concerns over the financial risks posed by El Salvador’s embrace of Bitcoin as legal tender, noting potential threats to fiscal stability, financial integrity, and consumer protections. A recent IMF recommendation urged El Salvador to narrow the scope of its Bitcoin law, strengthen oversight, and reduce the public sector’s exposure to cryptocurrencies—all steps aimed at fostering economic stability and sustainable growth.
President Nayib Bukele, an outspoken supporter of Bitcoin, has championed the cryptocurrency’s use since El Salvador became the world’s first country to grant it legal tender status in 2021. However, most Salvadorans still rely primarily on the U.S. dollar for everyday transactions, suggesting that Bitcoin’s mainstream adoption within the country remains limited.