The IMF loan agreement restricts Bitcoin promotion, decoupling government hoarding from public welfare.
El Salvador's Bitcoin ($BTC) reserves have limited impact on the general public, and the country's loan agreement with the International Monetary Fund (IMF) further complicates its Bitcoin strategy. Quentin Ehrenmann, the general manager of the NGO focusing on Bitcoin adoption 'My First Bitcoin', revealed to (Reuters) that abolishing Bitcoin's legal tender law under the IMF agreement has created a vacuum in public Bitcoin education.
Ehrenmann pointed out: 'Since the government signed the contract with the IMF, Bitcoin is no longer legal tender, and we have not seen any other efforts to educate the public. The government clearly continues to accumulate Bitcoin, which benefits the government; but there is no direct benefit for the people.'
This Central American country also agreed not to purchase any new bitcoins under the agreement, contradicting the claims of El Salvador's Bitcoin office that the country accumulates bitcoins daily.
El Salvador's legislature withdrew public sector participation in Bitcoin in January to maintain compliance under the IMF loan agreement, sparking debate about whether the country's Bitcoin experiment has ended in failure.
On-the-ground interviews reveal the reality gap; lack of education is the biggest barrier to adoption.
Foreign media (Cointelegraph) visited El Salvador in 2023 to understand how small businesses and ordinary people use Bitcoin. A journalist used IBEX Pay to pay for hotel accommodation with Bitcoin, a company that provides payment services to merchants through the Bitcoin Lightning Network. A hotel staff member accepting Bitcoin Lightning payments said: 'It's faster than credit cards.'
Nevertheless, the lack of education remains a major barrier to the widespread adoption of Bitcoin in El Salvador. Journalists had to show hotel staff how to accept payments via the Lightning Network, highlighting the unfamiliarity of grassroots people with Bitcoin technology.
The policy shift raises questions, and the effectiveness of the Bitcoin experiment is highly controversial.
El Salvador became the first country in the world to adopt Bitcoin as legal tender in 2021, but with the loan agreement with the IMF, the country was forced to adjust its Bitcoin policy, not only withdrawing Bitcoin's legal tender status but also promising not to buy new bitcoins.
This policy shift highlights the inherent contradictions in El Salvador's Bitcoin strategy:
On one hand, the government continues to hold and may privately accumulate Bitcoin for investment returns,
while on the other hand, it reduces support for public Bitcoin education and adoption.
Ehrenmann's observations point out the core issue of the policy: the government's Bitcoin accumulation primarily serves national fiscal interests rather than the financial inclusion of ordinary people.
This disconnection phenomenon reflects the fundamental flaws in El Salvador's Bitcoin policy implementation process: the lack of systematic public education, insufficient infrastructure development, and the gap between government commitments and actual execution. Whether the initially promised financial revolution can truly benefit the ordinary people remains an unanswered question.
See more news about 'El Salvador'
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This content is generated by Crypto Agent, summarizing information from various sources, reviewed and edited by (Crypto City). It is still in the training phase and may contain logical biases or information errors. The content is for reference only and should not be regarded as investment advice.
'El Salvador hoards coins, but the people are indifferent! Is Bukele's Bitcoin policy facing a crisis of trust?' This article was first published in 'Crypto City'.
