According to reports, El Salvador hopes to agree to a $1.3 billion loan agreement with the IMF in exchange for modifications to its Bitcoin Law.
According to reports, El Salvador, the first government in the world to recognize Bitcoin as legal cash, is reversing its plans to do so in response to pressure from the International Monetary Fund (IMF).
According to persons familiar with the situation, El Salvador hopes to agree to a $1.3 billion loan agreement with the IMF in exchange for modifications to the Bitcoin Law, the Financial Times said on December 9.
If approved, the agreement would force the El Salvadorian government to remove a law requiring companies to take Bitcoin (BTC) 99.225 as payment, making it an optional payment option.
The agreement, anticipated to be completed in the next two or three weeks, is also expected to open up an additional $1 billion in World Bank and $1 billion in Inter-American Development Bank funding over the following few years.
The International Monetary Fund (IMF) has long opposed El Salvador’s acceptance of Bitcoin, regularly alerting the government and Salvadoran President Nayib Bukele to the country’s financial stability risks associated with the September 2021 decision to make Bitcoin legal tender.
Since at least October, the IMF and the Salvadoran government have debated the $1.3 billion loan and potential modifications to the country’s Bitcoin law.