El Salvador’s parliament has approved changes to the 2021 law that made Bitcoin a legal currency on 29 January 2025.
The amendments repeal provisions allowing tax payments in Bitcoin and make accepting Bitcoin voluntary for businesses instead of mandatory.
The deal is part of an agreement with the International Monetary Fund (IMF) with the government of El Salvador to secure a USD 1.4 billion loan.
The IMF had said the loan was “to address balance of payment needs and support the government’s economic reforms.”
Additionally, taxes must be paid exclusively in US dollars, the nation’s other official currency.
On 7 September 2021, President Nayib Bukele made history by introducing bitcoin as a legal tender in El Salvador, aiming to integrate 70% of Salvadorans without access to traditional banking into the financial system.
