El Salvador Revises Bitcoin Laws to Comply with IMF Deal

El Salvador has swiftly passed new legislation aimed at adjusting its Bitcoin policies to meet the conditions of a $1.4 billion loan deal with the International Monetary Fund (IMF). The country’s Legislative Assembly ratified the bill on January 29, shortly after President Nayib Bukele submitted it. The new laws mark a significant reversal from the previous mandate, which required businesses to accept Bitcoin as payment.

The reform comes as part of a broader agreement struck with the IMF in December 2024, where the agency insisted that El Salvador scale back its exposure to Bitcoin. Specifically, the IMF called for the country to make the use of Bitcoin optional for private-sector merchants, rather than mandatory. The bill passed with overwhelming support, securing 55 votes in favor and just two against.

The Bitcoin Law Reversal

Under the previous law, El Salvador had become the first nation in the world to adopt Bitcoin as legal tender in 2021, requiring businesses to accept the cryptocurrency. However, the new legislation changes this mandate, ensuring that Bitcoin remains a legal tender while giving private businesses the freedom to decide whether or not to accept it.

Elisa Rosales, a lawmaker from Bukele’s ruling party, emphasized that the amendment was necessary to ensure Bitcoin’s “permanence as legal tender” while making its use more practical and manageable for businesses and the broader economy.

Continued Bitcoin Accumulation

Despite the shift in policy, El Salvador continues to embrace Bitcoin as part of its long-term economic strategy. The country has remained active in accumulating Bitcoin for its strategic reserves, recently adding 12 BTC to its holdings. As of January 2025, El Salvador holds 6,049 BTC, valued at approximately $633 million. This portfolio, purchased at an average price of $46,000 per Bitcoin, has seen a remarkable 127% return on investment.

A spokesperson for El Salvador’s Bitcoin Office stated that the country plans to continue purchasing Bitcoin, with intentions to "intensify" its buying efforts in 2025.

A Global Case Study

The spokesperson further highlighted that El Salvador's bold move to adopt Bitcoin has been transformative, not just for the country’s economic strategy but for its global image as well. “We have achieved not only the greatest rebrand in history, but we are now an actual case study for a winning country strategy,” they remarked.

El Salvador's Bitcoin experiment continues to draw international attention, as the country navigates the balance between cryptocurrency adoption and the demands of global financial institutions like the IMF.

Political Shake-Up in the U.S.

In a related political development, former U.S. Senator Bob Menendez, a vocal critic of El Salvador’s Bitcoin initiative, was sentenced to 11 years in prison on January 29. Menendez was convicted of bribery charges for accepting bribes in gold and cash, with FBI agents finding $480,000 in cash and gold bars worth an estimated $150,000 at his residence. The sentencing adds another layer of complexity to the ongoing debate surrounding cryptocurrency adoption and its role in international finance.

This latest move from El Salvador demonstrates its ongoing commitment to Bitcoin while navigating international financial pressures. As the country fine-tunes its Bitcoin strategy, it remains to be seen how the IMF deal and future global trends will influence its digital currency policies.