El Salvador reportedly removed the status of legal tendering of Bitcoin (BTC) after less than four years due to pressure from the International Monetary Fund (IMF).
According to a new report from BBC, the reform of the Bitcoin Act by El Salvador, which approved the country’s legislators last week and removed three of the provisions of the 2021 legislation that made it the first country in the world for one Cryptocurrency to be hired as a legal tender.
The report says that the changes volunteer the acceptance of Bitcoin and leave the official currency status of the active.
OneConomist Julia Evelin Martínez tells BBC the implications of removing the term “currency” and leave “legal tender” In the first article of the law, which reportedly caused confusion.
“The key is that the concept of currency disappears. For example: the euro is legal means of payment in the country because people can use it optionally if both parties agree, but it is not a legal means of payment because no one is obliged to accept payments in euros. “
The legislative meeting has passed on the reforms, while the government wants to conclude a $ 1.4 billion financing deal from the International Monetary Fund (IMF) that is conditional for El Salvador who reduces his bitcoin-related risks.
Last year, IMF spokesperson Julie Kozack said That the global lender El Salvador encouraged to reconsider his policy on Bitcoin as part of a discussion to support the economic reforms of the country.
“What we have recommended is a narrowing of the scope of the Bitcoin Act, strengthening the regulatory framework and the supervision of the Bitcoin ecosystem and limiting the exposure of the public sector to bitcoin.”
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