The IMF stated that risks tied to the adoption of Bitcoin as legal tender have been reduced. Businesses will now have the option to decide whether or not to accept Bitcoin, shifting from the previous mandate.
In 2021, El Salvador became the first country to make Bitcoin legal tender, a move that drew both praise and criticism globally.
This week, Bitcoin briefly reached a new record high, surpassing $108,000, before retreating slightly.
“The potential risks of the Bitcoin project will be significantly reduced in alignment with Fund policies,” the IMF said in its announcement. Legal reforms will make Bitcoin acceptance voluntary for private businesses, while public sector use of the cryptocurrency will be restricted to limited activities and transactions.
The loan deal, intended to bolster El Salvador’s economy, is still awaiting approval from the IMF’s executive board.
The IMF had previously opposed President Nayib Bukele’s pro-crypto policies, cautioning that they could hinder financial assistance. Despite this, Bukele celebrated Bitcoin’s recent surge on social media, noting that the value of the country’s Bitcoin holdings had more than doubled.
He also criticized his political opponents for allegedly causing Salvadorans to miss out on Bitcoin’s rapid price increase.
Bitcoin’s recent rally has been partially attributed to optimism following Donald Trump’s election victory in November. The incoming administration is expected to adopt a more crypto-friendly stance compared to President Joe Biden’s administration.
However, Bitcoin prices pulled back on Thursday, along with global stock markets, after the U.S. Federal Reserve signaled a slower pace of interest rate cuts in the coming year. Currently, Bitcoin is trading around $100,000.
