El Salvador is considering a revision to its Bitcoin law, which may allow merchants to accept bitcoin voluntarily, as part of a new agreement with the International Monetary Fund. According to a report by the Financial Times, this change would mean that businesses in the country would no longer be required to accept bitcoin as a form of payment.
The modification is a condition for El Salvador to access a $1.3 billion loan program from the IMF, with the World Bank and the Inter-American Development Bank expected to provide an additional $1 billion each, totaling $3.3 billion. The agreement is expected to be finalized within the next few weeks.
El Salvador made headlines in 2021 when it became the first country to adopt bitcoin as legal tender, giving it the same status as the US dollar. However, the IMF has expressed concerns over the country's bitcoin strategy, warning that it could pose a risk to financial stability.
The proposed law change is unlikely to have a significant impact on bitcoin adoption in the country, which has been relatively low. A recent survey found that 88% of Salvadorans had not used bitcoin in 2023.
In addition to the bitcoin law revision, the Salvadoran government will need to commit to reducing its budget deficit to 3.5% of GDP over three years, increase reserves, and pass an anti-corruption law. The National Commission of Digital Assets has already developed a comprehensive regulatory framework for crypto, but has not commented on the potential bitcoin law modification.