The Salvadoran Parliament approves a key reform to the Bitcoin Law.
Businesses are no longer required to accept BTC as a form of payment.
The amendment was approved with 55 votes in favor and 2 against.
The Parliament of El Salvador approved a project by Nayib Bukele to modify the Bitcoin Law and adapt it to the $1.4 billion agreement with the International Monetary Fund (IMF). The information was published by several international media.
The reform, approved with 55 votes in favor and only 2 against, comes from a Congress dominated by Bukele's Nuevas Ideas party. With this change, businesses will no longer be required to accept BTC as a means of payment, but its use will be completely voluntary.
In 2021, El Salvador made history by becoming the first country to adopt bitcoin as legal tender. The decision sparked intense global debate, generating both praise and criticism. Cryptocurrency enthusiasts saw it as a key step to reduce dependence on the traditional financial system, while organizations like the IMF and the World Bank questioned it, warning about the volatility of BTC and its potential use in illicit activities such as money laundering.
Over time, and after a long back-and-forth, El Salvador and the IMF reached an agreement in December in exchange for a $1.4 billion loan. The country needs these funds to strengthen its public finances, and the organization demanded that the acceptance of bitcoin be voluntary. Beyond that, there was no 180-degree turn in Bukele's government strategy. Moreover, El Salvador has continued to buy BTC steadily.
Elisa Rosales, a member of the Nuevas Ideas party, stated that the new amendment ensures that bitcoin continues as legal tender while optimizing its implementation. At the time of writing this article, El Salvador holds 6,049 BTC, valued at more than $630 million, according to the Nayib Bukele Portfolio Tracker website.
On several occasions, El Salvador has made it clear that it does not plan to sell its reserves based on the leading cryptocurrency. Beyond conceding on the aspect of the Law that now states that the acceptance of BTC is voluntary, to secure the IMF loan, the country decided to discontinue the Chivo Wallet, as confirmed by Stacy Herbert on social media X. In her post, the director of the National Bitcoin Office noted that this gap will be filled by private wallets operating in the country.
According to Max Keiser, a member of the National Bitcoin Office, El Salvador has already reached the fourth stage of BTC adoption: its recognition as a store of value, allowing the government to protect its wealth against inflation and volatility. Additionally, some regions of the country, such as Bitcoin Beach and Bitcoin Berlin, have advanced even further, operating in a circular economy based on BTC. Keiser explains that the adoption of bitcoin goes through five stages: discovery, recognition of its potential, use as a means of payment, consolidation as a store of value, and finally, hyperbitcoinization.
