El Salvador Congress Votes to Revoke Bitcoin's 'Legal Currency' Status (reason.com) 22
After finalizing loan terms with the IMF, El Salvador's Legislative Assembly approved changes to the country's Bitcoin Law last week by a 55-2 vote, "effectively removing bitcoin's status as legal currency," reports Reason.
Under the new rules, bitcoin is no longer considered "currency," though it remains "legal tender." Another change makes using bitcoin entirely voluntary. (Previously, the law mandated that businesses accept bitcoin for any goods or services they provided.) Additionally, bitcoin can no longer be used to pay taxes or settle government debts. The government is also stepping back from its involvement in Chivo Wallet, the state-backed digital wallet...
The reforms come as part of a broader financial agreement between Bukele and the International Monetary Fund (IMF). One of the conditions for a proposed $1.4 billion Extended Fund Facility loan was that El Salvador mitigate "potential risks of the Bitcoin project." The IMF has been critical of the country's crypto policies since Bukele made bitcoin legal tender in 2021. "There are large risks associated with using Bitcoin as legal tender, especially given the high volatility of its price. We don't recommend it," the organization said in 2022.
Despite these changes, the administration insists it remains committed to bitcoin. Milena Mayorga, El Salvador's ambassador to the United States, has said that El Salvador is still a "bitcoin country" and will maintain — and even expand — its bitcoin reserves. "You have to adapt to the current situation and this is the decision that was taken in the Assembly, but that does not mean that the country will stop having a bitcoin reserve," she explained.
Government data suggests El Salvador now holds 6,072 Bitcoin worth $586,888,000.
The reforms come as part of a broader financial agreement between Bukele and the International Monetary Fund (IMF). One of the conditions for a proposed $1.4 billion Extended Fund Facility loan was that El Salvador mitigate "potential risks of the Bitcoin project." The IMF has been critical of the country's crypto policies since Bukele made bitcoin legal tender in 2021. "There are large risks associated with using Bitcoin as legal tender, especially given the high volatility of its price. We don't recommend it," the organization said in 2022.
Despite these changes, the administration insists it remains committed to bitcoin. Milena Mayorga, El Salvador's ambassador to the United States, has said that El Salvador is still a "bitcoin country" and will maintain — and even expand — its bitcoin reserves. "You have to adapt to the current situation and this is the decision that was taken in the Assembly, but that does not mean that the country will stop having a bitcoin reserve," she explained.
Government data suggests El Salvador now holds 6,072 Bitcoin worth $586,888,000.
"...now holds 6,072 Bitcoin worth $586,888." (Score:1)
Re: (Score:2)
Think you'll find 6072 BTC is worth roughly $587.1 million USD???
And then there's tomorrow ... :-)
BTC is worth more (Score:3)
Government data suggests El Salvador now holds 6,072 Bitcoin worth $586,888.
No, you missed by three orders of magnitude, although it was likely a typo.
Right now it's worth 585.941.385 USD
Re: (Score:2, Interesting)
Except that it has the same problem as, say, Elon Musk's shares of Tesla stock. Any attempt to actually liquidate that much bitcoin would crash the price.
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The trouble with El Salvador is Bitcoin was always just a way for their upper elites to hide money overseas that they had stolen from the public in preparation for when they inevitably have to flee the country. So it's not really worth much of anything to the country itself.
Re: (Score:1)
Ah yes, it's always the upper elites.
Such as the canadian truckers that got all of their assets frozen when the government abused its power to shut down their right to protest.
They're still buying Bitcoin (Score:3)
> Government data suggests El Salvador now holds 6,072 Bitcoin worth $586,888.
And they bought more just the other day. The IMF should have insisted that they stop and sell their reserves before receiving any more loans. It's like giving money to a gambling addict.
Re: (Score:1)
Re: (Score:3)
El Salvador isn't a gambling addict,
If that's so true, then why is it begging the IMF for a loan?
Re: (Score:2, Insightful)
Re: (Score:2)
Are the other nearly 100 countries who've taken the loans also gambling addicts? Low quality comment
Were they also required to reduce their risk due to their use of cryptocurrency?? High quality question.
Re: (Score:2)
Of course, it makes perfect sense to mandate people accept a currency that fluctuates significantly in value in the time it takes to just verify the transaction. Who knew?
Bitcoin City (Score:2)
You spend currency, crypto isn't spent that way (Score:2)
People don't really buy with crypto so it can't be a currency. Crypto is more inline with a security, like stock.
The same way people who trade with their gut are speculators not investors (trading based on facts).
If more people framed it this way they might second guess what they should spend their hard earned money on.