On Wednesday, El Salvador revealed that it had purchased an additional bitcoin, bringing the country’s total strategic bitcoin reserve to over 6,102 coins. The announcement follows closely on the heels of a recent agreement between the International Monetary Fund (IMF) and El Salvador, in which the IMF approved a 40-month program worth $1.4 billion. This agreement signaled a shift in the role of bitcoin in the country, downgrading its status from the legal tender it was granted in 2021.
Under the new arrangement, bitcoin can no longer be used for paying taxes, and its adoption by the public is now voluntary rather than mandatory, contrary to initial expectations. The Salvadoran government has committed to the IMF not to further accumulate bitcoin at the national public sector level. A spokesperson from the IMF stated that they had consulted with the Salvadoran authorities, who assured that the recent increase in bitcoin holdings was consistent with the agreed-upon terms of the IMF program.
While the IMF did not elaborate on how purchases made by the National Bitcoin Office do not add to the government’s exposure to the cryptocurrency, the announcement was seen as an attempt to balance the country’s growing bitcoin reserve with its international financial commitments.
Meanwhile, Salvadoran government dollar bonds saw a slight decline in price, particularly the 2050 and 2041 maturities, which dropped by 0.75 cents on the dollar. The Salvadoran government currently holds around $550 million in bitcoin, having acquired 12 more bitcoins since the IMF’s approval of the agreement last week.