PANews reported on February 2 that according to the Spanish newspaper El País, the El Salvador Congress recently approved the reform of the Bitcoin Act, officially canceling Bitcoin's status as legal tender. The reform was carried out after nearly two years of pressure from the International Monetary Fund (IMF), which set a condition of "reducing the risk of Bitcoin" in exchange for Kenyan President Nayib Bukele's approval of a much-needed $1.4 billion loan. If the Salvadoran government wants to receive the money, it must amend the law before the last day of January.
More than three years after the law was implemented, deputies have amended six of its articles and repealed three of the sixteen. From now on, Bitcoin will no longer be considered "currency"; its acceptance will become voluntary instead of mandatory, and it will not be used for taxation. The ruling party was forced to make these changes. Despite being very active on social media, President Bukele has not said anything about it.
Bitcoin was approved as legal tender in El Salvador in September 2021, despite 71% of the public opposing it, according to polls. Despite this, the government has invested more than $200 million to establish an operational framework, create digital wallets, and install ATMs across the country.
The law required all businesses and public institutions to accept Bitcoin unless they did not have the technology necessary to conduct transactions. To encourage usage, the government offered a $30 bonus to every user who installed the official Chivo wallet on their phone. A year later, only 21% of the population had used the service, according to a survey by Ludop, one of El Salvador’s most prestigious polling firms. By 2024, only 8.1% of the population reported using it.
