El Salvador added 11 new bitcoins to its national reserves while continuing its approach to expand BTC holdings.
The acquisition on February 4 increased the national Bitcoin supply to 6,067 BTC, with a current market value of over $616 million. This acquisition comes amid a shift in the country’s Bitcoin policies following an agreement with the International Monetary Fund (IMF).
El Salvador expands Bitcoin holdings despite IMF agreement.
The Central American nation has been steadily accumulating Bitcoin, initially following a policy of purchasing one BTC daily. The company demonstrates increased Bitcoin investment tendencies by purchasing more than twenty bitcoins weekly. El Salvador purchased Bitcoin only one day after completing a $1.4 billion agreement with the IMF, while the IMF demanded Bitcoin policy modifications.
The transaction binds Bitcoin to non-status as a national currency while making Bitcoin exchange use optional for all citizens. The agreement states that Bitcoin transactions become voluntary and requires the state to reduce its Bitcoin oversight while also making the Chivo wallet system privately owned. El Salvador has expanded its Bitcoin investment, although the nation has altered specific aspects of its crypto strategy.
Mixed reactions to El Salvador’s Bitcoin strategy
The country’s bitcoin investment has prompted ongoing discussions between financial institutions, economic experts, and crypto analysts. Bitcoin adoption through financial inclusion helps El Salvador become a leader in digital asset integration because it creates economic diversification. Several participants expressed concerns about the uncertainties of market fluctuations and regulatory conditions.
Financial stability issues caused concern at the IMF, while various worldwide financial institutions worried about Bitcoin’s effects on stability. Despite international concerns, El Salvador accumulates Bitcoin assets because the government believes in its future advantages. The government continues to invest funds because it understands Bitcoin represents an essential piece of its financial approach, even with outside opposition.
Bitcoin is no longer legal tender but remains an accepted payment option
Following the IMF agreement, El Salvador’s congress passed a reformed Bitcoin Act that removes BTC’s status as legal tender. The new law clarifies that Bitcoin is not considered a national currency, but transactions in BTC remain permissible if both parties agree. Businesses are no longer required to accept Bitcoin, and the cryptocurrency cannot be used for tax payments.
Although Bitcoin no longer holds legal tender status, the government’s recent purchases indicate that it remains an integral part of El Salvador’s financial framework. While the long-term effects of this strategy remain uncertain, the country’s commitment to Bitcoin continues despite policy changes.