Key Takeaways
- Ruling party lawmaker Elisa Rosales said the amendment was necessary to guarantee Bitcoin’s “permanence as legal tender”
- El Salvador continues to buy Bitcoin for its national reserves.
El Salvador’s Congress has quickly passed a new law changing the country’s Bitcoin policy to meet conditions set by the International Monetary Fund (IMF) as part of a $1.4 billion loan deal.
The amendment, approved with 55 votes in favor and only two against, removes the requirement for businesses to accept Bitcoin, making it optional instead.
The bill was sent to Congress by President Nayib Bukele and approved within minutes. Lawmakers from Bukele’s ruling New Ideas Party, which holds a majority in the Legislative Assembly, ensured its smooth passage. Ruling party lawmaker Elisa Rosales said the amendment was necessary to guarantee Bitcoin’s “permanence as legal tender” while improving its “practical implementation.”
El Salvador became the first country in the world to make Bitcoin legal tender in 2021, alongside the U.S. dollar, which has been the country’s official currency since 2001. The decision was controversial, with critics warning about Bitcoin’s volatility and the risks it could pose to the country’s economy. The IMF has repeatedly urged El Salvador to limit its exposure to Bitcoin, and one of the key conditions for the loan deal signed in December was to make Bitcoin use completely voluntary for businesses.
Despite the legal change, El Salvador continues to buy Bitcoin for its national reserves. The country recently purchased 12 more BTC and now holds a total of 6,049 BTC, valued at around $633 million. A spokesperson for El Salvador’s Bitcoin Office said last month that the government plans to “intensify” its Bitcoin purchases in 2025. The country’s Bitcoin investments have so far generated a 127% profit, with an average purchase price of $46,000 per Bitcoin.
Bukele’s embrace of Bitcoin has been a major part of his administration, drawing attention from crypto supporters worldwide. His government has argued that Bitcoin can boost financial inclusion, attract investment, and reduce dependence on the U.S. dollar. However, international organizations, including the IMF and World Bank, have criticized the policy, warning that Bitcoin’s price swings could harm the country’s finances.
The recent changes to the law suggest that El Salvador is adjusting its approach to balance its Bitcoin strategy with economic stability and international financial obligations. While Bitcoin remains legal tender, businesses are no longer required to accept it, making the policy more flexible.
In a separate development, former U.S. Senator Bob Menendez, who had opposed El Salvador’s Bitcoin law, was sentenced to 11 years in prison on corruption charges. According to the Associated Press, FBI agents found $480,000 in cash and gold bars worth around $150,000 at his home.
