El Salvador Defies IMF, Bitcoin To Thrive Under Bukele’s Second Term?

El Salvador, reaffirming its commitment to cryptocurrency, has declared that Bitcoin will maintain its legal tender status during President Nayib Bukele’s anticipated second term. Despite the International Monetary Fund’s (IMF) call for reconsideration during loan negotiations, Vice President Felix Ulloa, temporarily on leave for re-election, emphasized the government’s unwavering stance.

Meanwhile, this announcement follows the U.S. Securities and Exchange Commission’s (SEC) nod to Bitcoin ETFs, bolstering El Salvador’s conviction. As the nation heads to the polls, the promise of a Bitcoin-backed bonds launch and the creation of a tax-free crypto haven, Bitcoin City, looms large.

El Salvador Remains Committed To Bitcoin

El Salvador stands firm in its resolve to uphold Bitcoin as legal tender, defying the International Monetary Fund’s call for reconsideration during loan negotiations, Reuters reported. It’s worth noting that El Salvador has a distinctive approach to digital payments, especially towards Bitcoin.

Meanwhile, Vice President Felix Ulloa emphasized the government’s unwavering commitment, citing the recent endorsement from the U.S. Securities and Exchange Commission (SEC) as a pivotal factor. The SEC’s decision to permit U.S.-listed Spot Bitcoin ETFs to track Bitcoin has further fueled the nation’s confidence in its cryptocurrency-centric policies.

Notably, El Salvador’s vision extends beyond mere adoption. He emphasized that if President Bukele and the New Ideas party secure a predicted victory in the upcoming election, plans for bitcoin-backed bonds would proceed. In addition, the creation of Bitcoin City envisioned as a tax-free crypto haven, and the issuance of passports to investors contributing $1 million in cryptocurrency are also slated to move forward in the first quarter of 2024.

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Vision Towards Digital Payment

In a groundbreaking move in 2021, El Salvador diverged from traditional financial paradigms by embracing Bitcoin as a legal tender. The initiative aimed at fostering financial inclusion, job creation, and simplifying remittances set El Salvador apart as the first country to tread this uncharted path.

Despite facing criticism, particularly from the IMF, the Salvadoran government, led by President Bukele, remains steadfast in its commitment. Meanwhile, Ulloa has confirmed the country’s commitment to maintaining its Bitcoin law, asserting its global credibility.

In a recent interview with Reuters, Ulloa emphasized the law’s unwavering status, stating, “At this moment, it enjoys the greatest credibility in the entire world.” Notably, Ulloa expressed optimism about overcoming obstacles to accessing IMF financing, noting that a significant portion of the package has already been agreed upon, despite concerns about escalating public debt.

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