Very shocking news for the Bitcoin sector due to an agreement between El Salvador, a Bitcoin bullish country, and the IMF, which hates Bitcoin.
The International Monetary Fund (IMF) is an international financial institution. This institution provides financial assistance and policy advice to member countries to help them fight payment problems, usually due to economic instability, high inflation or unsustainable debt levels. In addition, the IMF provides loans to countries that need financial support to stabilize their economies, but with certain conditions, for example, restructuring the country’s economy.
On December 18, 2024, the IMF body published the latest details on a loan agreement with the Central American country El Salvador.
Under the terms of the agreement, El Salvador limits its participation in the country’s national digital Bitcoin wallet,”Billy goat”, and also leaves the focus of Bitcoin-related development on public sector participation. That means that economic activity related to Bitcoin will remain largely confined to cryptocurrency-focused companies and not government authorities.
If the agreement is followed exactly, El Salvador will receive $1.4 billion from the IMF over the next 40 months.
The IMF agency stated that “The potential risks of the Bitcoin project will be significantly reduced in accordance with the Fund’s policies. “The legal reforms will make the acceptance of Bitcoin by the private sector voluntary.”
Many economic experts noted that such agreements will not affect El Salvador’s Bitcoin vision and will give a further boost to the country’s economy. With this agreement, El Salvador’s debt-to-GDP ratio will fall significantly, which is a very good sign for this country’s economy.
Bitcoin price action
Following this news, the trading price of Bitcoin plummeted by 5% in the last few hours. The current trading price of Bitcoin is $99,676.
To control the level of panic among Bitcoin investors, the president of El Salvador confirmed that his country will continue buying 1 BTC every day.
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