Zinger Key Points
- The reform ensures Bitcoin remains legal tender but removes the previous requirement forcing businesses to accept it.
- The decision follows Bitcoin’s price surge, fueled by Trump’s election win and expectations of pro-crypto policies in the U.S.
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El Salvador's Congress passed a legislative amendment on Wednesday to alter the country's Bitcoin BTC/USD policy, making its acceptance voluntary rather than mandatory.
What Happened: The move, introduced by President Nayib Bukele, was approved as part of efforts to meet conditions set by the International Monetary Fund in a $1.4 billion loan agreement, according to Reuters.
Under the new framework, Bitcoin remains legal tender, but businesses will no longer be obligated to accept it as a means of payment.
The IMF had previously recommended limiting El Salvador's exposure to Bitcoin and making its use optional in the private sector.
El Salvador became the first nation to recognize Bitcoin as legal tender in 2021, positioning itself as a trailblazer in digital currency adoption.
However, this decision brought mixed reactions from international financial institutions, with the IMF and World Bank raising concerns over potential risks tied to Bitcoin's volatility.
The amendment passed with 55 votes in favor and two against in the Bukele-dominated legislature.
Lawmaker Elisa Rosales defended the measure, stating that it provides a balanced approach by ensuring Bitcoin's continued status as legal tender while also making its integration into the country's financial system more practical.
Also Read: Bitcoin To Hit Up To $130,000 In The Next Weeks: Standard Chartered
Bukele's administration has indicated that despite regulatory adjustments, El Salvador remains committed to Bitcoin and plans to continue accumulating the asset as part of its national reserves.
The country has already made multiple Bitcoin purchases and introduced Bitcoin-backed government bonds to attract investment.
What’s Next: The reform comes as Bitcoin's market value surges, driven in part by growing institutional interest and the recent election of U.S. President Donald Trump, who has signaled a more crypto-friendly stance.
By making Bitcoin acceptance voluntary, El Salvador aims to balance its ambitions of leading crypto adoption while maintaining financial stability under the IMF-backed economic plan.
While Bitcoin's long-term role in the country remains intact, the latest amendment reflects a more measured approach to its integration into the nation's economy.
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