IMF points to reduction of Salvadoran state participation in bitcoin

The Salvadoran state’s participation in bitcoin-related activities is being dismantled as regulations strengthen, according to the IMF after approving a new loan tranche of 140 million dollars to the country. El Salvador committed to completely eliminate any exposure of its public accounts to cryptocurrencies during discussions of the 1.4 billion dollar support program signed with the Fund. The IMF indicated that no further accumulation of bitcoin is expected beyond documented donations and that priority should be given to improving transparency and disclosure of public sector crypto asset holdings, as well as refining regulatory and governance frameworks. The issue of bitcoin has been the most closely followed by the IMF since President Nayib Bukele signed the credit line. The IMF plan required El Salvador to reduce its bitcoin experiment, which had made it a favorite in the cryptocurrency industry. The growth of El Salvador's economic activity has exceeded expectations, and the government continues with its adjustment and fiscal stability program. The GDP growth outlook for this year is 4.5%. However, around 30% of Salvadorans live in poverty, and the cutback plans have severely affected the public sector.

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