El Salvador has been forced to abandon its Bitcoin legal tender plan in exchange for a $1.4 billion loan from the International Monetary Fund (IMF), according to a report by Cointelegraph on August 1, 2023. The IMF has long been criticized for its role in the economic colonization of emerging countries, and this move is seen by some as a continuation of that practice.
El Salvador became the world's first country to adopt Bitcoin as legal tender in September 2021. However, the adoption of Bitcoin by the general public has been slow, with only a small percentage of Salvadorans using the cryptocurrency. The IMF has been critical of El Salvador's Bitcoin strategy, warning of financial and legal risks. In order to receive the $1.4 billion loan, El Salvador has agreed to reduce its Bitcoin purchases, no longer accept tax payments in Bitcoin, and restrict public sector Bitcoin activities.
The IMF's actions have been met with criticism from some who see them as an attempt to stifle the adoption of Bitcoin. The IMF has a history of imposing conditions on countries that receive loans, and this move is seen by some as a continuation of that practice. The IMF's actions are likely to have a negative impact on the adoption of Bitcoin in El Salvador and other countries.