OK, OK, that's certainly not an appropriate thing to say to a lender and didn't actually happen but… It has to have been implied.
As you probably know, the Central American country, El Salvador began buying Bitcoin in 2021, and pledged to buy a minimum of one daily along the line. It has stayed consistent since this public pledge and now claims the spot of the 6th largest Bitcoin holder as a country with over $500 million in portfolio value.
In addition to this, under the leadership of President Nayib Bukele, the country also made Bitcoin legal tender in the country, also in September 2021 and mandated that it is accepted as a payment method by businesses.
El Salvador remains to date, the only country where Bitcoin is legalized as payment currency. This early government recognition of Bitcoin's value has put El Salvador in various news coverages where the country has faced both positive press and a load of negative reporting.
That said, the law to mandate the acceptance of Bitcoin as payments has recently been scaled down to please the IMF.
El Salvador is set to make merchant acceptance of Bitcoin voluntary, unwind its involvement in its little-used Chivo wallet and make public sector engagement of Bitcoin-related economic activity “confined” as part of a $1.4 billion loan deal with the International Monetary Fund.
The Central American nation will get $1.4 billion from the IMF over the next 40 months after agreeing to measures aimed at dropping its debt-to-GDP ratio, the global lender said in a Dec. 18 statement.
“The potential risks of the Bitcoin project will be diminished significantly in line with Fund policies. Legal reforms will make acceptance of Bitcoin by the private sector voluntary,” the IMF said.
As reported on Cointelegraph.
This appeared as a forced action but it wasn't much trouble because it did not roll back it's law on Bitcoin being legal tender, it simply made it voluntary for businesses to accept it, which is frankly reasonable as Bitcoin's volatility could threaten the stability of small businesses and blockchain and crypto education is still on the low end.
But this adjustment by El Salvador seems to have made the IMF think they now have cards to influence much of El Salvador’s bitcoin operations.
As a result, the IMF requested that El Salvador stops its Bitcoin purchases.
On March 3, the IMF issued a new request for an extended arrangement under its fund facility to El Salvador, filing several new documents, including a staff statement update and a statement by its executive director for El Salvador.
The technical memorandum of understanding indicated a condition of “no voluntary accumulation of BTC by the public sector in El Salvador.”
Additionally, the memorandum requested the restriction of public sector issuance of “any type of debt or tokenized instrument that is indexed to or denominated in Bitcoin and implies a liability to the public sector.” — Cointelegraph report
What was El Salvador’s response?
No and my translation: Go Fuck Yourself, no filter, I know.
El Salvador President Nayib Bukele said his government won’t stop buying Bitcoin despite a new request from the International Monetary Fund to stop.
“No, it’s not stopping,” Bukele said in a March 4 X post, confirming El Salvador wouldn’t comply with the IMF’s request.
“If it didn’t stop when the world ostracized us and most ‘bitcoiners’ abandoned us, it won’t stop now, and it won’t stop in the future,” he added. CT
Certainly it's unclear if the IMF executives will proceed with the $1.4 billion fund facility to El Salvador or not. It is also unclear how that might affect the country moving forward.
But what's rather certain is that El Salvador holds a profitable Bitcoin position that sets it several steps ahead of far richer countries.
Judging by its approximately $34 billion GDP, its Bitcoin stash, which is 6,089 at the time of writing, could become a unique wealth reserve.