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El Salvador’s Congress has just passed significant amendments to its Bitcoin Law by a rapid act of legislation—in line with any conditions set by the International Monetary Fund (IMF) to turn the giant’s loan faucet back on for the small Central American nation. The Legislative Assembly passed the bill almost immediately after President Nayib Bukele proposed it, according to a report by Reuters published on January 29. 
IF The IMF Lends, It Requires Changes to the Bitcoin Policy
El Salvador also received a $1.4 billion loan from the IMF in December 2024 that was conditioned on the African country winding down its Bitcoin projects. It required making Bitcoin acceptance voluntary for enterprises, restricting public authorities from engaging in cryptocurrency activities, and keeping Bitcoin as a payment solution for taxes. These actions are meant to address the financial risks posed by the volatility of this third-largest cryptocurrency.
Loss of Legislative Agenda and Policy Changes
The proposed reforms were swiftly ratified by the Legislative Assembly, which voted 55 to 2 in favor. Under the previous law, businesses were even legally obligated to accept Bitcoin as payment; under the new legislation, this requirement has been eliminated, and accepting Bitcoin is now voluntary again.
Ruling party congresswoman Elisa Rosales underlined that the amendment was needed both for the “permanence of Bitcoin as legal tender” and to ensure its “practical implementation.”
Government’s Ongoing Support for Bitcoin
These policy changes have not diminished the Salvadoran government’s Bitcoin strategy. According to an official from the National Bitcoin Office, the country plans to continue to acquire Bitcoin, possibly at a faster pace, to be stored in its strategic reserves. As of January 2025, El Salvador owns some 6,043 Bitcoins, and they are worth some $611 million.
Public Response and Future Expectations
The Bitcoin adoption as legal tender in 2021 had some people excited and some skeptical. Although the government has made significant efforts to encourage the use of Bitcoin, including the rollout of the Chivo digital wallet, take-up among the public has been limited.
The recent policy shifts are, however, part of a strategic recalibration—not a blanket abandonment of the country’s plans for crypto, a byproduct of the IMF agreement. The administration continues to promote Bitcoin’s role in the future of El Salvador’s economy alongside prudent fiscal governance.
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FAQs
1. What has been the impact of El Salvador changing its Bitcoin law?
The bill is a revision of El Salvador’s Bitcoin law that was needed to qualify it for a $1.4 billion loan deal with the IMF. Instead of mandating the use of Bitcoin, the amendment makes the use of Bitcoin for businesses optional and limits government intervention in cryptocurrency transactions.
2. Is Bitcoin a legal tender currency in El Salvador?
Yes, Bitcoin is still legal tender in El Salvador. But businesses are not required to accept it anymore. Despite regulatory changes, the government still maintains Bitcoin in its reserves and intends to make additional purchases.
3. What was the vote in the Legislative Assembly regarding the reform?
The reform was passed with 55 votes for and only two votes against. Lawmakers noted that the change was needed to clarify Bitcoin’s legality while also making it more practical for businesses and financial institutions.
4. What does this say for El Salvador’s Bitcoin hoard?
The country still has over 6,000 BTC in its possession, worth hundreds of millions. The officials have vowed to keep on accumulating Bitcoin and expect purchases to ramp up substantially in 2025 when regulations for businesses will change.
