El Salvador’s experiment with Bitcoin (BTC) as legal tender is ending as the country complies with IMF demands. President Nayib Bukele, once a strong BTC advocate, has rolled back key policies in pursuit of U.S. dollar financing.
Bitcoin’s Diminished Role
The government removed Article 4, which allowed tax payments in BTC, effectively stripping its legal tender status. Businesses are no longer required to accept BTC, and it is no longer considered a currency under law.
Limited BTC Use
Residents can’t use BTC for government fees or services, though it remains exempt from capital gains taxes. The government may still hold it as a reserve asset.
IMF Influence
These changes are part of a deal unlocking $1.4 billion in IMF loans, alongside $2.1 billion from other financial institutions. The state-backed Chivo wallet is also expected to shut down due to low adoption.
Source: https://protos.com/bitcoin-is-no-longer-legal-currency-in-el-salvador/