Did El Salvador kneel? Or no longer vigorously promote Bitcoin payments, but compromise for $3 billion bailout money?

El Salvador, the world's first country to adopt Bitcoin as legal tender, may now have to bow to the International Monetary Fund (IMF) under real pressure.

According to the Financial Times, in order to meet the conditions of the IMF and obtain international loans totaling $3 billion, El Salvador plans to amend its regulations and cancel the requirement for merchants to accept BTC payments.

IMF pressure, BTC legislation compromise?

In 2021, Salvadoran President Nayib Bukele pushed for BTC to become a legal currency, alongside the US dollar, with lightning speed.

However, the IMF has opposed this policy from the beginning, believing that BTC could pose risks to national financial stability, and has repeatedly requested El Salvador to narrow the scope of its BTC policy.

According to the Financial Times, in order to obtain a $1.3 billion loan from the IMF, as well as an additional $1 billion assistance from the World Bank and the Inter-American Development Bank (IDB), El Salvador intends to compromise and no longer require businesses nationwide to accept BTC as a payment method, but instead allow businesses to choose whether to accept BTC payments.

The $3 billion aid package is undoubtedly a 'timely rain' for El Salvador, which is under heavy fiscal pressure.

BTC adoption falls short of expectations, with limited impact from policy adjustments

Although BTC has gained a lot of exposure for El Salvador internationally, its actual application is not as expected.

According to a survey earlier this year, up to 88% of Salvadorans did not use BTC for transactions at all in 2023. Although many merchants claim to accept BTC payments, the actual usage is very low. Therefore, the direct impact of this policy adjustment on the domestic BTC ecosystem may not be as significant as imagined by the outside world.

IMF conditions are not limited to one item, and there is great pressure for fiscal reform.

In addition to relaxing BTC payment regulations, El Salvador also needs to commit to reducing government spending, increasing tax revenue, and reducing the fiscal deficit to 3.5% of GDP within 3 years.

In addition, the IMF also requires El Salvador to pass an anti-corruption bill and increase forex reserves, which shows that the IMF is not only following the impact of Bitcoin on the country's financial system, but also focusing on the overall financial stability of El Salvador.

As the first country in the world to attempt 'BTC fiatization', every step taken by El Salvador has brought inspiration to the global development of Cryptocurrency. Despite the controversy and challenges surrounding this national BTC experiment, the story it has initiated is far from over.

In the future, how El Salvador balances between the fiscal regulations of the IMF and the freedom of BTC policy will be the focus of global attention.

【Disclaimer】The market is risky and investment should be cautious. This article does not constitute investment advice, and users should consider whether any opinions, viewpoints, or conclusions in this article are applicable to their specific circumstances. Invest at your own risk.

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'Did El Salvador kneel? Or no longer forcefully promote Bitcoin payments, compromise for 3 billion yuan in lifesaving money?' This article was first published in 'encryption city'