Key Points:
- The El Salvador Bitcoin Act has now been amended, removing its legal tender status.
- The decision aligns with IMF conditions for a $1.4 billion loan, prompting changes to the 2021 Bitcoin legislation.
El Salvador’s Congress has passed a revised Bitcoin Act, officially removing the cryptocurrency’s status as legal tender, according to reports from El País.
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El Salvador Bitcoin Act Ends Legal Tender Status
The decision comes as the country seeks to comply with International Monetary Fund (IMF) conditions to secure a $1.4 billion loan.
The reforms, which modify six articles and eliminate three from the original 2021 El Salvador Bitcoin Act, make Bitcoin use voluntary rather than mandatory. Merchants and institutions are no longer required to accept it, and it can no longer be used for tax payments. The digital asset is now relegated to private transactions between individuals and companies.
Despite the significance of the change, the revised El Salvador Bitcoin Act has sparked confusion and criticism due to ambiguous wording, particularly in the amendment to the first article. According to the BBC, while the term “currency” has been removed, the word “legal” remains, leading to uncertainty over Bitcoin’s precise status in the country’s financial system.
Public Concerns and Bukele’s Silence
The reform proposal was introduced by Tourism Minister Morena Valdez at the request of President Nayib Bukele. However, Bukele, who has been a strong advocate for Bitcoin and frequently discusses economic policies on social media, has remained silent on the matter.
While Bukele initially championed Bitcoin as a tool for financial inclusion and economic growth, public opinion suggests otherwise. Polls indicate that the majority of citizens have not seen any tangible benefits, and the nation’s economic challenges persist.
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