El Salvador Secures $1.4 Billion IMF Deal While Limiting Bitcoin Plans
El Salvador's bitcoin initiatives are now restricted under a 40-month, $1.4 billion Extended Fund Facility (EFF) approved by the International Monetary Fund (IMF) on February 26. Key points include:
- The EFF aims to address macroeconomic issues and enhance growth, with an immediate disbursement of $113 million.
- The IMF has prohibited the public sector from accumulating bitcoin during the program.
- As of February 24, El Salvador held over 6,081 BTC, valued around $600 million.
- President Nayib Bukele indicated a recent purchase of 19 BTC as the price fell below $90,000.
- Bitcoin usage in El Salvador remains limited due to high volatility and low public trust.
- Tax payments in bitcoin have been minimal and will soon be prohibited.
- A prior requirement for EFF approval was the amendment to the Bitcoin Law, making its acceptance voluntary for private entities.
- The EFF aims for a 3.5% GDP primary balance improvement over three years, with expected medium-term growth of 2.5% to 3% and debt reduction to 81% of GDP by 2029.