The President of El Salvador, Nayib Bukele, assured on Tuesday that the country “will not stop” and will continue buying bitcoin for its strategic reserve, despite the fact that the crypto asset will no longer be legal tender in the local economy. “No, it does not stop (the purchase of bitcoin). If it didn’t stop when the world condemned us to ostracism and most ‘bitcoiners’ abandoned us, it won’t stop now and it won’t stop in the future,” the president stated on his X account.
Bukele did not specify when ‘bitcoiners’ stopped seeing El Salvador as an option. The president’s reaction comes after the National Bitcoin Office, which is the government entity in charge of managing cryptocurrency-related projects, published on Tuesday that the country had purchased “another bitcoin for strategic reserve.”
With that purchase, El Salvador “owns” 6,101 bitcoins with a value of 534.7 million dollars, according to the National Bitcoin Office. At the end of January, Congress, which is dominated by the ruling party, approved a confusing reform to the Bitcoin Law at Bukele’s request, as a requirement to receive a 1.4 billion dollar loan from the International Monetary Fund (IMF).
The reform, published in the Official Gazette on January 30, will come into effect 90 days after that publication, meaning April 30. In the reform, the word “currency” was eliminated when referring to bitcoin, but it says it is “legal tender.” Despite the lack of clarity, it removes, at the IMF’s insistence, the obligation to accept it in transactions or debt payments, a key condition for it to be “legal tender,” according to economic analysts.
The use of bitcoin in El Salvador’s dollarized economy, according to the new regulation, will be optional and it will be at the discretion of the private sector to accept payments in cryptocurrency for goods and services. As part of the agreements with the IMF, El Salvador agreed to limit the participation of the public sector in activities and transactions related to bitcoins and in the purchase of this electronic currency.
Last week, the IMF approved the agreement with El Salvador for the 1.4 billion dollar loan that will help the country strengthen its public finances.
