The change occurs in the midst of a complex economic context for the country that is in a negotiation with the International Monetary Fund for a loan of US $ 1,400 million. With a confusing wording, the new law removed the term “currency” to the cryptoactive, although it will continue to be “of legal course“
El Salvador leaves Bitcoin in the midst of negotiations with the IMF
The law reform project Bitcoin – by which the cryptoactive was adopted as legal tender in the country in September 2021 -, was presented by the Minister of Tourism, Morena Valdez, at the request of President Bukele. In total, the Legislative Assembly controlled by the ruling party approved the modification of six articles and the elimination of three of the legislation.
The reform was sent, in low profile and without advertising publicly – Bukele still did not make public comments in this regard and was almost immediately approved in the Legislative Power with 55 votes in favor and two against.
Bitcoin Law, implemented in 2021, forced all Salvadoran businesses to accept cryptocurrencies within their transactions, promoting a multimillion -dollar government investment to adapt ATMs, a digital wallet and general facilities to favor the circulation of cryptoactive. In addition, that same year the Salvadoran government also issued an incentive of US $ 30 for merchants to install ‘Chivo Wallet’, the country’s official digital wallet.
The decision of the Bukele administration arrives in the midst of its negotiations with the IMF for a loan of about US $ 1,400 million for the Central American country. In this scenario, from the fund they put a series of ‘recommendations to accept the agreement, among which are: Reduction in government spendingincrease state transparency, increase liquidity reserves in national banks and “mitigate the risks of Bitcoin”
The deadline to materialize the changes required by the IMF It is this Friday, January 31. In this way the Salvadoran government finally He yielded and proceeded to the express approval of the reform.
According to Bitcoin Office, government website, El Salvador currently has a reserve of some 6,049 bitcoins – approximately some U $ S637.3 million – However, it is not known if the country sold cryptocurrencies in recent times.
How will the future of Bitcoin continue in El Salvador
The reform of the Bitcoin Law generated confusion and criticism due to the writing of some of the modified articles. In this sense, the term was eliminated “currency“, but the denomination was left”of legal course“
What does this mean? That in El Salvador it will continue to be legal to use Bitcoin – such as other coins, such as the euro for example -, for transactions between people, provided that both parties agree. In this way, it will be “legal course” but it is not “legal tender” because no one will be obliged to accept payments in the cryptoactive.
Before the reform, the Law forced shops, companies and public institutions to receive cryptocurrency Unless they did not have the technology to perform the transactions. With the reforms, acceptance becomes voluntary.
In addition, from the change of the Bitcoin Law, Salvadoran citizens may no longer pay their taxes with cryptocurrency. For its part, the State may no longer make its debt payments with the cryptoactive: “The monetary obligations of the State, domestic and external, must be paid in the coins that were contracted“, says the renewed article 12.
Despite the changes, the ambassador of El Salvador in the United States, Milena Mayorga, said her country remains “Bitcoin Country”, because she has a cryptocurrency reserve that will continue to expand. “You have to adapt to the situation of the moment and this is the decision that was made in the assembly, but that It does not mean that the country will stop having a bitcoin reserve“He said.
Source: Ambito
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