According to a report by COINOTAG News on March 4th, the International Monetary Fund (IMF) is taking steps to impose stricter controls on the public sector of El Salvador in relation to Bitcoin procurement. As part of the nation’s $1.4 billion Extended Fund Facility, the IMF has introduced updated stipulations that limit the public sector’s ability to voluntarily acquire Bitcoin. The newly issued Technical Memorandum of Understanding explicitly prohibits any Bitcoin accumulation by governmental entities.
Additionally, the memorandum outlines the ban on the issuance of any debt instruments linked to Bitcoin or priced in Bitcoin, which would be classified as a liability to the state. In a statement from February 26th, Méndez Bertolo, El Salvador’s Executive Director, highlighted that these measures aim to bolster governance and transparency while mitigating Bitcoin-associated risks. Recent amendments to the Bitcoin Law have clarified its legal status, determining that acceptance of Bitcoin will be voluntary and tax obligations will remain in dollars, thus limiting the public sector’s role in Bitcoin initiatives.
This strategic realignment is anticipated to draw in significant financial support from major institutions such as the World Bank and the Inter-American Development Bank, enhancing the nation’s economic stability while carefully managing cryptocurrency exposure.