IMF Seeks To Limit Bitcoin Purchases By El Salvador's Public Sector

According to Cointelegraph, the International Monetary Fund (IMF) is aiming to impose stricter controls on Bitcoin acquisitions by El Salvador's public sector as part of a $1.4 billion extended funding agreement with the nation. On March 3, the IMF submitted a request for an extended arrangement under its fund facility to El Salvador, accompanied by several new documents, including a staff statement update and a statement by the executive director for El Salvador. The technical memorandum of understanding outlined a condition prohibiting the voluntary accumulation of Bitcoin by El Salvador's public sector. Furthermore, it called for restrictions on the public sector's issuance of any debt or tokenized instruments that are indexed to or denominated in Bitcoin, which could imply a liability to the public sector. In a statement dated February 26, Méndez Bertolo, the executive director for El Salvador, highlighted that the IMF's extended fund facility is designed to enhance governance, transparency, and resilience, thereby boosting confidence and the country's growth potential. Bertolo noted that Bitcoin-related risks are being mitigated, with amendments to the Bitcoin Law clarifying the legal status of Bitcoin and removing its essential features as legal tender. Acceptance of Bitcoin will be voluntary, tax payments will be made in U.S. dollars, and the public sector's role in the Bitcoin project will be limited. Bertolo also mentioned that the program is anticipated to attract significant additional financial support from the World Bank, the Inter-American Development Bank, and other regional development banks. This story is developing, and further updates will be provided as more information becomes available.