El Salvador Revokes Bitcoin's Legal Tender Status Amid IMF Pressure

According to PANews, El Salvador's Congress has approved reforms to the Bitcoin Law, officially revoking Bitcoin's status as legal tender. This decision comes after nearly two years of pressure from the International Monetary Fund (IMF), which set a condition to 'reduce Bitcoin's risk' in exchange for a crucial $1.4 billion loan approved by U.S. President Donald Trump for Kenyan President Nayib Bukele. To receive the funds, the Salvadoran government had to amend the law by the end of January. The law, in effect for over three years, saw six provisions amended and three of sixteen repealed. Bitcoin will no longer be considered 'currency'; its acceptance is now voluntary rather than mandatory, and it will not be used for tax payments. The ruling party made these changes reluctantly. Despite President Bukele's active presence on social media, he has not commented on the matter. Public opinion polls indicated that 71% of the population opposed Bitcoin's adoption as legal tender when it was approved in September 2021. Nevertheless, the government invested over $200 million to establish an operational framework, create digital wallets, and install ATMs nationwide. The law required all businesses and public institutions to accept Bitcoin unless they lacked the necessary technology for transactions. To encourage usage, the government offered a $30 bonus to users who installed the official Chivo wallet on their phones. However, a survey by Ludop, one of El Salvador's most renowned polling companies, revealed that only 21% of the population used the service a year later, and by 2024, only 8.1% reported using it.