By Nelson Rentalia and Rodrigo Campos
SAN SALVADOR (Reuters) – El Salvador announced its Bitcoin purchase on Wednesday. Bitcoin has announced that it has totaled more than 6,102 coins in the country’s strategic reserves.
The Bitcoin purchase announcement implies a downgrade of cryptocurrency status in the Central American country just days after the International Monetary Fund Committee approved a 40-month program with El Salvador for $1.4 billion. Bitcoin cannot be used to pay taxes and its acceptance by the public is voluntary, and this is not what was expected when it was given a statutory bid position in 2021.
Importantly, the government has promised the IMF not to accumulate more Bitcoin “at the public sector-wide level.”
“We discussed with (Salvadran) authorities and have assured that the recent increase in Bitcoin holdings in the Strategic Bitcoin Reserve Fund was consistent with the agreed program terms,” a spokesperson for the fund said.
The IMF did not respond to further questions about how purchases by national offices would not add government cryptocurrency exposure.
The Salvadora presidential office did not immediately respond to a request for comment.
Salvadora’s dollar bonds saw prices fall mostly on Wednesday, with maturities in 2050 and 2041 down 0.75 cents in dollars.
El Salvador has purchased 12 Bitcoins since the IMF announced its board approval for the contract last week in December. The government says it currently holds nearly $550 million in Bitcoin.
(Reporting by Nelson Rentalia of San Salvador and Rodrigo Campos of New York, edited by Sandra Muller)