El Salvador Defies Critics, Expands Bitcoin Treasury Again
El Salvador has once again expanded its Bitcoin reserves, purchasing 11 additional BTC $103 408 on January 20, 2025. This latest acquisition comes shortly after the country secured a $1.3 billion loan agreement with the International Monetary Fund (IMF), which included recommendations to scale back its Bitcoin investments.
Despite ongoing criticism from global financial institutions, El Salvador remains committed to its Bitcoin strategy, reinforcing its position as a pioneer in sovereign crypto adoption.
El Salvador’s IMF Loan Agreement and Bitcoin Strategy
In December 2024, El Salvador finalized a 40-month Extended Fund Facility (EFF) with the IMF, designed to stabilize its economy and support ongoing fiscal reforms. The agreement provided much-needed financial relief but also included expectations that the government would limit its exposure to Bitcoin and focus on more traditional economic measures.
The IMF had previously expressed concerns over El Salvador’s Bitcoin adoption, citing risks related to financial stability, market volatility, and regulatory uncertainty.
Despite these recommendations, El Salvador defied expectations by acquiring more Bitcoin just a day after finalizing the IMF agreement. The move highlights the country’s determination to continue integrating Bitcoin into its Financial framework, even in the face of international pressure.
The country made its second Bitcoin acquisition on January 20, bringing its total holdings to $650 million.
Value of El Salvador’s Strategic Bitcoin Reserve tops $650M
Verify:
— The Bitcoin Office (@bitcoinofficesv) January 20, 2025
El Salvador’s Bitcoin Journey Since Legalization
El Salvador made history in September 2021 by becoming the first nation to recognize Bitcoin as legal tender alongside the US dollar. The initiative aimed to enhance financial inclusion, attract foreign investment, and reduce remittance costs for Salvadorans living abroad.
To facilitate adoption, the government launched the “Chivo Wallet,” provided financial incentives for citizens to use Bitcoin, and installed Bitcoin ATMs nationwide.
However, the country’s Bitcoin experiment has not been without challenges. Technical issues with the Chivo Wallet, public skepticism, and price volatility have complicated the implementation of Bitcoin payments. The IMF and World Bank have repeatedly urged El Salvador to reconsider its stance, arguing that widespread Bitcoin adoption could pose financial risks.
Despite these obstacles, President Nayib Bukele remains steadfast in his commitment to Bitcoin. His administration views the flagship crypto asset as a hedge against inflation and a tool for economic empowerment.
With the success of El Salvador’s Bitcoin endeavours, market experts expects countries like Argentina to follow in its footsteps. The South American nation has seen many companies in the region add Bitcoin to their treasures. On January 17, industry media reported that corporate entities like Bitfarms, Mercado Libre and Globant has a combined Bitcoin portfolio of 1300 BTC.
Bitfarms, the largest Bitcoin mining company in Argentina, has a decent portfolio of 870 BTC.
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2025-01-20 22:09