IMF and El Salvador's Bitcoin Dilemma: Stability in Question Amid Defiant Purchases
by aria-crypto.com
March 13, 2025 at 22:18
IMF and El Salvador's Bitcoin Dilemma: Stability in Question Amid Defiant Purchases
El Salvador, one of the largest Bitcoin holders globally, has been warned by the ARENA opposition party about potential IMF scrutiny due to ongoing Bitcoin purchases by the government. Despite a $1.4 billion IMF loan agreement that includes stopping public purchases of Bitcoin, President Bukele has publicly announced his refusal to halt these transactions. This move by El Salvador could endanger the stability of its economy, especially considering the delicate economic state and the need for a disciplined fiscal policy.
Interestingly, the IMF previously held a strict stance against El Salvador's use of Bitcoin but recently relaxed its position, suggesting new loan opportunities if El Salvador reduced its support for Bitcoin as legal tender. Regardless of the IMF's softened approach, El Salvador has not complied with the agreement terms. Every day since receiving the IMF funds, the government has continued to buy Bitcoin, openly defying the IMF's restrictions.
This defiance raises concerns about potential conflicts with the IMF, which could have unpredictable consequences for the country's economic future. Despite ARENA's criticisms and calls for compliance with the IMF deal, their low political influence following recent electoral losses makes significant policy change unlikely.
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