The El Salvador congress approved a reformed Bitcoin Act which removes the currency status of Bitcoin in the jurisdiction of El Salvador.
El Salvador is a popular Central American country known for its Bitcoin adoption strategies. Since 2021, under the presidency of the country’s president Nayib Bukele, the El Salvador government introduced multiple Bitcoin-focused initiatives so that the adoption of Bitcoin can be done uniformly by the government authorities as well as citizens.
On 2 Feb 2025, A Spanish newspaper, El País, published a report on the latest development around Bitcoin in the Bitcoin bull country El Salvador and confirmed that Bitcoin is now going to lose its legal tender status.
As per the report, Congress passed a reformed Bitcoin Act to cancel Bitcoin’s legal tender status.
The report noted that the decision was made under pressure from the International Monetary Fund (IMF) to meet the agreement for obtaining a $1.4 billion loan.
So now, under the new Bitcoin Act, Bitcoin is not a currency in this country, but merchants and institutions are allowed to accept it voluntarily. Alternatively, we can say that two parties can use Bitcoin as a payment tool if both of them agree to use Bitcoin as a mode of payment. Alongside the payment option, it cannot be used to pay taxes.
Country’s President Nayib Bukele adopted Bitcoin as a secondary currency in Sep 2021 officially and also helped to give a very impactful boost to the country’s economy but polls & survey data show that the majority of the people have not benefited and are not interested to use Bitcoin as a currency because of the volatility in the value of BTC.
El Salvador vs IMF
We know that the IMF is an international body that helps nations stabilize currencies, reduce poverty, and implement economic reforms by providing loans.
Since 2021, the IMF body has been against this country. Many times, they published reports regarding the country’s bold decision of using Bitcoin as a legal tender & talked about its risks to the country’s economy.
The majority of the time, El Salvador’s president slammed every Bitcoin hater’s suggestions directly or indirectly, but this latest development around this top Cryptocurrency raised a very big question among Bitcoin enthusiasts.
No more Bitcoin adoption in El Salvador?
This news acted as a catalyst to bring bearish sentiments among crypto enthusiasts, as Bitcoin lost its legal tender status in the top Bitcoin bull country.
Here, Bitcoin folks need to know only Bitcoin lost the status of currency, but adoption is not lagging behind because people are still free to use Bitcoin in the form of payment via third-party registered digital Bitcoin wallets, and also El Salvador will continuously purchase & mine Bitcoin.
To reduce the negativity around the country’s Bitcoin adoption strategy, this country is buying 2 BTC per day, double what they planned.
Bitcoin price action
The current trade price of Bitcoin is $97,127 & this price level is 3.68% down over the last 24 hours period.
Bitcoin price crashed below $97k level : source CoinMarketCap (CMC)
Experts believe more downfall is also coming, as two big news stories are creating bearish sentiment among crypto investors.
