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El Salvador Signs Agreement with Nvidia to Boost Sovereign AI Initiatives

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  • El Salvador collaborates with Nvidia to boost national AI capabilities and innovation.
  • AI partnership with Nvidia aims to improve healthcare, education, and economic growth.
  • El Salvador uses AI initiatives for local talent development and national challenge resolution.

Nvidia partnered with El Salvador through an agreement to launch artificial intelligence (AI) into the country’s development initiatives. The new partnership, announced on, targets numerous sectors across the country, including the economy, education, the environment, and healthcare. 

Through this collaboration, El Salvador established leadership status in AI implementation among developing countries and supports its goal of employing technology for national economic development and innovation.

Strengthening National AI Capabilities

El Salvador gains access to Nvidia’s AI resources and expertise through its initiative. The country also aims to develop AI capabilities that suit its domestic needs, concentrating on fundamental areas like culture, language preservation, environmental management, and economic productivity.

The government plans to establish AI training programs for developers, researchers, and officials to ensure a sustainable talent pool for long-term AI ambitions. El Salvador’s training programs through AI seek to equip the country’s workforce with the skills necessary to address issues peculiar to the country in the areas of better provision of healthcare systems, higher educational outcomes, and more efficient use of resources. 

For instance, this application considers using AI to forecast weather patterns to aid emergency responses, protect vulnerable communities from landslides, and improve hydroelectric power management. These projects demonstrate how AI can be used for national resilience and sustainable development.

Priority for El Salvador

Furthermore, collaborating with Nvidia is part of the country’s broader AI strategy. In March 2025, the government launched a university-level AI program named CUBO_ai, which is supported by key industry figures like Bitcoin advocate Cathie Wood. The aim is to invite the best AI experts to work in El Salvador to help the country build its AI ecosystem. This educational initiative aims to give the government the technical ability to deploy and sustain advanced AI models.

Despite challenges in its operations, the International Monetary Fund imposed restrictions on Bitcoin purchases in March 2025, and El Salvador’s AI projects continued to advance. The country remains committed to building AI-driven and advanced innovative solutions for traditional and emerging technologies.

Expanding AI Infrastructure for the Future

As part of its AI strategy, El Salvador plans to leverage telecom infrastructure to support the development of local AI models. Telecom operators are increasingly seen as key enablers of AI, as they can host data centers equipped with accelerated computing resources to power sovereign AI projects. 

Nvidia has been building “AI factories” that enhance AI models tailored to the local context, including language and cultural norms. The method simultaneously improves national security and performance while preserving control over local data ownership.

El Salvador Defies IMF, Expands Bitcoin Holdings to 6,111 BTC

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  • El Salvador acquired six more Bitcoins, increasing its holdings to 6,111 BTC.
  • The country purchased Bitcoin during a market downturn to strengthen its reserves.
  • El Salvador accumulated 19 BTC in March, which is worth around $1.57 million.

El Salvador has strengthened its Bitcoin holdings by acquiring six more BTC, bringing its total reserves to approximately 6,111 BTC. The country made this latest purchase during a market downturn, reinforcing its strategy of accumulating Bitcoin at lower prices. Despite warnings from the International Monetary Fund (IMF), El Salvador remains committed to expanding its cryptocurrency portfolio.

El Salvador Buys More Bitcoin Amid Market Drop

The Bitcoin Office of El Salvador confirmed that the government acquired six BTC for about $500,000. This purchase included five BTC added to its reserves and one BTC obtained through its daily acquisition strategy. The move aligns with the country’s ongoing commitment to increasing its Bitcoin holdings despite market fluctuations.

El Salvador’s Bitcoin accumulation in March reached 19 BTC, worth approximately $1.57 million at current prices. Over the past week, the country acquired 18 BTC, valued at around $1.4 million. The latest transaction occurred as Bitcoin’s price declined by 12%, hovering near $80,000.

Government officials have indicated that market corrections present an opportunity for strategic Bitcoin purchases. The country has followed a pattern of acquiring Bitcoin during previous downturns, maximizing potential long-term gains. This approach suggests confidence in Bitcoin’s future value despite short-term volatility.

IMF Pressures El Salvador to Limit Bitcoin Involvement

Due to financial and regulatory concerns, the IMF has repeatedly urged El Salvador to limit its Bitcoin activities. The IMF proposed conditions restricting Bitcoin purchases as part of negotiations for a $1.4 billion financial aid package. The agreement required El Salvador to scale back public sector involvement in cryptocurrency transactions and strengthen digital asset regulations.

One of the IMF’s key conditions sought to prevent El Salvador from voluntarily acquiring Bitcoin. Under the proposed agreement, the country could only hold Bitcoin obtained through legal processes such as seizures and forfeitures. These restrictions aimed to align El Salvador with international financial standards and reduce exposure to cryptocurrency risks.

Despite adjusting some policies to address global concerns, El Salvador continues acquiring Bitcoin. The government previously removed the mandatory acceptance of Bitcoin for businesses and limited its use in tax payments. However, the ongoing accumulation signals a firm commitment to integrating Bitcoin into its financial strategy.

Bukele Stands Firm on Bitcoin Strategy

President Nayib Bukele has repeatedly emphasized the importance of Bitcoin in El Salvador’s economic plans. He maintains that the country will continue purchasing Bitcoin despite external pressures. His administration believes that Bitcoin provides financial inclusion and long-term growth opportunities.

Stacy Herbert, director of El Salvador’s Bitcoin Office, noted that the country strategically buys Bitcoin during price declines. She highlighted that similar purchases occurred during previous market corrections, reinforcing the government’s long-term investment strategy. The administration views Bitcoin as a valuable asset that will benefit the national economy.

Despite global concerns, El Salvador remains focused on strengthening its Bitcoin holdings. The government’s continuous acquisitions indicate confidence in Bitcoin’s potential and its role in financial development. The country’s total Bitcoin reserves now stand at 6,111 BTC, worth over $504 million at current market prices.

Bitcoin (BTC) Usage Massive Fall: Only 7.5% of Salvadorans Participate

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  • El Salvador’s 2021 Bitcoin adoption faced challenges, leading to policy reversals in 2025.
  • Amendments include making BTC acceptance voluntary and ending its use for tax payments.
  • Grassroots Bitcoin initiatives persist, reflecting ongoing local support despite governmental policy changes.

In 2021, El Salvador made headlines as the first nation to adopt Bitcoin (BTC) as legal tender, a move that garnered global attention. However, recent amendments to its BTC law have altered this pioneering stance. Samson Mow, CEO of Bitcoin advocacy firm JAN3, believes these changes make El Salvador “less unique” in the cryptocurrency landscape.

Under President Nayib Bukele’s leadership, El Salvador embraced Bitcoin in 2021, aiming to revolutionize its economy. The government introduced the Chivo Wallet, a state-backed digital wallet, and mandated businesses to accept Bitcoin as payment. Citizens received $30 in BTC to encourage adoption. Despite these efforts, by 2022, only 20% of businesses accepted BTC, and a mere 7.5% of Salvadorans used it regularly. The majority preferred traditional cash transactions.

Facing economic challenges and seeking a $1.4 billion loan from the International Monetary Fund (IMF), El Salvador amended its Bitcoin law in early 2025. The revisions made BTC acceptance by businesses voluntary and prohibited its use for tax payments. The government also decided to phase out its involvement with the Chivo Wallet. These changes were conditions set by the IMF to mitigate financial risks associated with cryptocurrency.

Samson Mow, whose firm JAN3 was instrumental in El Salvador’s initial Bitcoin adoption, expressed disappointment over the recent amendments. He noted that El Salvador’s unique position in the crypto world has diminished. Mow pointed out that other regions, such as Bhutan and Prospera, now offer similar or even more favorable conditions for BTC enthusiasts.

Ongoing Bitcoin Initiatives

Despite the policy shift, grassroots Bitcoin initiatives in El Salvador continue. In the municipality of Berlín, over 100 businesses still accept BTC, driven by local leaders like Evelyn Lemus who promote BTC education. Additionally, El Salvador’s BTC Office remains active, recently announcing the addition of another BTC to the country’s holdings.

Screenshot 474
Source: The Bitcoin Office

El Salvador’s experience serves as a case study for other nations considering cryptocurrency adoption. The initial enthusiasm showcased the potential for financial innovation, but the subsequent policy reversals highlight the challenges and risks involved. As countries like Guatemala observe El Salvador’s journey, they may approach BTC adoption with increased caution, balancing innovation with economic stability.

El Salvador’s bold experiment with BTC has been a rollercoaster of ambition, challenges, and adjustments. While the nation has scaled back its official support, the enduring grassroots initiatives indicate that BTC’s story in El Salvador is far from over. The world watches closely, drawing lessons from this pioneering endeavor.

Bitfinex Disrupts Investment in El Salvador With Tokenized Bitcoin Mining Notes,BMN2 in 2025

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  • BMN2 offers Bitcoin mining exposure with a lower investment threshold.
  • El Salvador’s Digital Asset Laws enable more accessible investments.
  • Bitfinex plans additional tokenized products in the El Salvador market.

In a move to further solidify El Salvador’s position as a global crypto hub, Bitfinex is set to launch its Blockstream Mining Note 2 (BMN2) in the first quarter of 2025. This tokenized product offers investors an accessible way to earn Bitcoin mining income with lower entry barriers.

Bitfinex Introduces Lower-Cost Bitcoin Mining Investment

Bitfinex Securities plans to launch Blockstream Mining Note 2 (BMN2) in El Salvador during the first quarter of 2025. This tokenized financial product will allow investors to receive Bitcoin mining income from Blockstream’s operations. The issuance of BMN2 follows the success of the BMN1 version, which was launched in Luxembourg and yielded substantial returns.

BMN2 will be issued under Salvadoran laws, with a lower investment threshold than BMN1. The Luxembourg version required a minimum investment of $100,000, while the new notes offer more accessible options. Bitfinex aims to attract a broader range of investors by lowering the entry barriers for the BMN2 in El Salvador.

Bitfinex Expands Crypto Offerings with Tokenized Financial Products

BMN2 notes are tokenized debt instruments, similar to bonds, but offer exposure to Bitcoin mining. Investors holding these notes will earn returns based on the BTC mined through Blockstream’s infrastructure. The notes leverage blockchain technology to provide a secure and efficient market for tokenized assets, making it easier to trade and manage investments.

Jesse Knutson, Bitfinex Head of Operations, explained that the BMN2 offers a unique investment opportunity. He stated that the company is working closely with El Salvador’s National Commission of Digital Assets (CNAD) to secure approval. The launch of BMN2 is part of Bitfinex’s strategy to make El Salvador a central hub for digital asset markets in 2025.

The tokenized product allows investors to directly participate in Bitcoin mining through a regulated platform. Bitfinex’s platform will allow investors to buy and sell the BMN2 notes, to expand their access to digital assets. Moreover, the company plans to introduce other tokenized financial products, such as real estate shares, bonds, and funds.

El Salvador’s Regulatory Environment Fuels Bitfinex’s Tokenized Launch

Under the leadership of President Nayib Bukele, El Salvador has created a favorable regulatory environment for digital assets. In 2021, El Salvador became the first nation to adopt Bitcoin as legal tender, attracting global attention and investment.

Bitfinex’s initiative to issue BMN2 in El Salvador aligns with the country’s vision of becoming a global crypto hub. The firm’s recent activities reflect El Salvador’s rising prominence as a financial center for the digital economy..

Moreover, Bitfinex introduced tokenized U.S. Treasury bills under El Salvador’s Digital Asset Issuance Act. The company aims to expand its services with the issuance of new financial instruments on the platform. These initiatives underscore El Salvador’s role as a leader in blockchain and digital asset adoption.

Bitfinex recently acquired a Digital Asset Service Providers license which further strengthened its presence in El Salvador. The company’s commitment to expand the digital asset market is evident in its efforts to create innovative products and services. 

Disclaimer:

The information provided on this website is intended for general informational purposes only and does not constitute professional financial advice. Users should conduct their own research and consult with a licensed financial advisor before making any investment decisions. By using this site, you acknowledge and accept that you are solely responsible for your investment choices and any associated risks.

IMF Pressure? El Salvador Weakens Bitcoin Law Amid Loan Deal

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  • El Salvador’s Congress passed a bill making Bitcoin acceptance optional for businesses.
  • The amendment aligns with the country’s $1.4 billion loan agreement with the IMF.
  • Bitcoin remains legal tender, but is no longer mandatory for private businesses.

El Salvador’s Congress has passed a bill to modify its Bitcoin laws, aligning with its $1.4 billion loan agreement with the International Monetary Fund (IMF). Lawmakers approved the measure on January 29, just minutes after President Nayib Bukele sent it to the Legislative Assembly. The reform eliminates the mandate requiring businesses to accept Bitcoin, making its use optional.

El Salvador Drops Bitcoin Mandate for Businesses

The bill received 55 votes in favor and only two against, marking a shift in the country’s crypto policies. The amendment ensures Bitcoin remains legal tender while removing compulsory acceptance by private businesses. Government officials say the change aims to balance innovation with financial stability while complying with IMF requirements.

El Salvador made Bitcoin a legal tender in 2021, drawing global attention and mixed reactions from financial institutions. Businesses were previously required to accept Bitcoin alongside the U.S. dollar, which some found challenging due to volatility. The latest reform allows companies to decide whether to accept Bitcoin, easing concerns among business owners and investors.

Despite the adjustment, El Salvador continues expanding its Bitcoin reserves, purchasing 12 BTC for its national holdings. The government now holds 6,049 BTC, valued at approximately $633 million, with an average acquisition price of $46,000 per Bitcoin. Officials confirm the country has no plans to sell, maintaining Bitcoin as a core part of its economic strategy.

The National Bitcoin Office confirmed plans to accelerate Bitcoin acquisitions in 2025. Director Stacy Herbert indicated the government remains committed to its Bitcoin strategy despite the legal adjustment. Authorities also announced plans to phase out or sell the Chivo wallet, allowing private companies to offer alternatives.

Meanwhile, the same day Congress passed the amendment, former U.S. Senator Bob Menendez received an 11-year sentence for bribery. FBI agents found $480,000 in cash and $150,000 in gold bars in his home. Menendez had been a vocal critic of El Salvador’s Bitcoin policy, adding an ironic twist to the timing of his conviction.

U.S. States Push for Bitcoin Treasury Reserves

Several U.S. states, including New Hampshire and North Dakota, have introduced legislation to add Bitcoin to their treasury reserves. Texas, Pennsylvania, and Ohio have also proposed measures to diversify their financial holdings with cryptocurrency. Lawmakers argue Bitcoin can serve as a hedge against economic uncertainty and inflation.

Texas Representative Giovanni Capriglione introduced the Texas Strategic Bitcoin Reserve Act, aiming to hold Bitcoin for at least five years. Pennsylvania Representative Mike Cabell proposed allocating up to 10% of the state’s balance sheet in Bitcoin. Corporate investors like MicroStrategy and Metaplanet have also increased their Bitcoin holdings, signaling broader institutional interest in cryptocurrency.

El Salvador’s decision to amend its Bitcoin laws reflects a strategic balance between financial innovation and economic stability. While the country remains committed to Bitcoin, the latest changes align its policies with international financial agreements. The move highlights the evolving relationship between governments, digital assets, and global financial institutions.

Disclaimer:

The information provided on this website is intended for general informational purposes only and does not constitute professional financial advice. Users should conduct their own research and consult with a licensed financial advisor before making any investment decisions. By using this site, you acknowledge and accept that you are solely responsible for your investment choices and any associated risks.

Tether’s Bold Move: Relocating Headquarters to Bitcoin Hub El Salvador

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Key Takeaways:

  • Tether’s relocation aligns with El Salvador’s Bitcoin-driven economic model, emphasizing digital currency empowerment.
  • The move enhances Tether’s commitment to financial inclusion in underserved regions.
  • Establishing headquarters in El Salvador offers a supportive environment for innovation and growth.

Tether is on the brink of completing its formal transition to El Salvador, marking a significant milestone in the company’s journey toward global Bitcoin adoption.

Following the granting of a DASP license, the company will locate its headquarters in this progressive country. This strategic relocation further demonstrates its commitment to financial inclusion and innovation in a sound regulatory environment.

Its progressive stance regarding digital assets has made El Salvador a hub for blockchain and cryptocurrency around the world. The first to adopt Bitcoin as legal tender, its pro-innovation policy has laid the ground for companies like Tether to blossom.

By placing its operations in El Salvador, the company is right at the center of such a dynamic ecosystem that supports technological advancement and financial freedom.

Relocation Highlights Tether’s Operational Agility and Innovation

But El Salvador has grown in the FinTech space, and this is just the right time for Tether to scale operations. Its very supportive regulatory regime and citizens who are quite savvy in Bitcoin place El Salvador as a perfect location from where the company can continue its objective of empowering the relatively underserved markets.

Tether’s move underlines its operational flexibility and further cements its place in being able to innovate in a rapidly changing financial environment.

This creates a strategic advantage for the company in deploying state-of-the-art solutions to leverage the full potential of Bitcoin, since their vision aligns with El Salvador’s. This further extends their commitment to fostering financial freedom through decentralized technologies and spreads their presence worldwide.

Paving the Path for Financial Transformation

Tether’s move into El Salvador is much more than an address change. It’s one of intent. The company will go hand-in-hand with the local government and businesses, engineering the future financial systems for countries. It’s now setting sights on the developing world, making Tether the catalyst for Bitcoin and, more generally speaking, stablecoin adoption in most places of high importance.

In turn, this positions El Salvador as the new center of digital finance, where Tether is going to be headquartered. A deal like this brings new drive to the business objectives of the company and underlines the ambition of El Salvador to be among the hottest places in the world when it comes to innovation related to digital assets.

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El Salvador’s Big Bet: Bukele Set to Scoop Bitcoin (BTC) Amid Crash

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  • El Salvador’s President Nayib Bukele plans to increase Bitcoin holdings amid falling prices.
  • The US government sold $6.7 billion worth of Bitcoin seized from the Silk Road.
  • Bitcoin prices dropped to $94,061.07, marking a 1.26% decline in 24 hours.

El Salvador President Nayib Bukele has indicated plans to increase Bitcoin (BTC) holdings as prices face downward pressure. The US government recently sold $6.7 billion worth of BTC tokens seized from the Silk Road. This development has sparked speculation about further declines in Bitcoin’s value, presenting opportunities for accumulation.

Bitcoin Faces Price Drop After US Government’s Sell-Off

Bitcoin prices have dropped below $95,000, with the current price at $94,061.07, marking a 1.26% decline in 24 hours. The flagship cryptocurrency saw its market cap and trading volume decrease by 1.25% and 2.99%, respectively. Following the recent sell-off, analysts expect increased selling pressure to continue affecting the market.

The US Department of Justice’s decision to sell a substantial amount of BTC has intensified market volatility. Many investors view this as a chance to capitalize on discounted prices, while others brace for further declines. Some analysts predict BTC could hit $90,000, creating a critical buying opportunity for long-term investors.

Bukele Sees BTC Dip as Golden Opportunity

Despite recent losses, many market participants remain optimistic about BTC’s long-term potential. Prominent figures, including author Robert Kiyosaki and President Bukele, consider the current price dip a buying opportunity. This sentiment aligns with El Salvador’s consistent strategy to boost its cryptocurrency reserves and promote mainstream adoption.

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Source: X

Bukele’s potential move to acquire more BTC underscores his government’s commitment to cryptocurrency as a national asset. The country has already integrated Bitcoin into its financial system, setting an example for other nations. Many investors see this approach as forward-thinking amid growing global interest in digital currencies.

Traders Debate BTC’s Future Amid Price Uncertainty

Bitcoin’s near-term performance remains a topic of speculation, with divergent views among traders and analysts. Some argue that price correction presents a strategic entry point, while others advise caution. The coming weeks will likely determine whether BTC’s value stabilizes or declines further.

Market observers are closely watching for any developments, including potential actions by influential figures like Donald Trump. His recent involvement in the cryptocurrency space has drawn attention to the sector’s political and economic implications. The situation remains dynamic, with many investors preparing to respond to further price movements.

Bitcoin’s journey continues to capture global interest, with El Salvador at the forefront of crypto adoption. President Bukele’s hinted purchase could reaffirm the nation’s pioneering role in the cryptocurrency market.

El Salvador’s Bitcoin Reserves Reach 6,000 BTC, Valued at $569M

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  • El Salvador now holds over 6,000 BTC, solidifying its position as the sixth-largest national BTC holder.
  • Accelerated purchases and daily Bitcoin investments highlight El Salvador’s unwavering commitment to cryptocurrency integration.
  • Expanding global ties and regulatory advancements position El Salvador as a leader in crypto innovation.

El Salvador, lеd by Prеsidеnt Nаyib Bukеlе, hаs mаdе notаblе progrеss in its Bitcoin аdoption. It now holds morе thаn 6,000 BTC in its trеаsury, which highlights thе nаtion’s strong commitmеnt to cryptocurrеncy. El Salvador rаnks аs thе sixth-lаrgеst holdеr аmong countriеs, following prominеnt globаl plаyеrs likе thе Unitеd Stаtеs, Chinа, аnd thе Unitеd Kingdom.

On Dеcеmbеr 29, El Salvador’s Nаtionаl Bitcoin Officе аnnouncеd thе аcquisition of 1 morе Bitcoin. This аddition incrеаsеs thе country’s totаl rеsеrvеs to 6,000.77 BTC, vаluеd аt аpproximаtеly $569.3 million. Thе аvеrаgе аcquisition cost stаnds аt $45,450, rеflеcting а rеmаrkаblе 108.02% rеturn, аs pеr Nаyib Bukеlе’s portfolio trаckеr.

BTC
Source: El Salvador Bitcoin Office

Thе nаtion’s journеy into Bitcoin bеgаn on Sеptеmbеr 6, 2021, whеn it bеcаmе thе first country to аdopt it аs lеgаl tеndеr. Thе initiаl аcquisition of 200 BTC mаrkеd thе bеginning of аn аmbitious finаnciаl strаtеgy аimеd аt intеgrаting cryptocurrеncy into thе country’s еconomy.

El Salvador Expands Bitcoin Holdings

Dеspitе globаl skеpticism аnd criticism from institutions likе thе Intеrnаtionаl Monеtаry Fund (IMF), El Salvador continuеs to еxpаnd its holdings. Thе country’s rеcеnt аcquisitions includе а $1 million purchаsе following а lаndmаrk $1.4 billion аgrееmеnt with thе IMF. Additionаlly, thе govеrnmеnt hаs mаintаinеd its strаtеgy of buying onе BTC dаily.

Dirеctor of thе Nаtionаl Bitcoin Officе, Stаcy Hеrbеrt, hintеd аt аn еvеn fаstеr pаcе of аccumulаtion in thе futurе. In аn X post on Dеcеmbеr 19, Hеrbеrt еmphаsizеd unwаvеring dеdicаtion to thе cryptocurrеncy аs а corе finаnciаl strаtеgy. A spokеspеrson from thе officе rеinforcеd this sеntimеnt, stаting,  “Bitcoin continuеs to bе our mаin strаtеgy,” whilе ruling out аny plаns to sеll thе country’s holdings.

Mеаnwhilе, El Salvador’s Chivo wаllеt, initiаlly introducеd to fаcilitаtе BTC trаnsаctions, is sеt to bе sold or phаsеd out. Hеrbеrt еxprеssеd optimism thаt privаtе-sеctor BTC wаllеts will tаkе ovеr аnd continuе to sеrvе thе nееds of Salvadorаns еffеctivеly.

El Salvador’s Crypto Regulatory Advancements

El Salvador continues to progress with its regulatory framework for digital assets. The country recently granted Bitget authorization to provide BTC services, including fiat currency exchanges, payment solutions, and secure custody options. Bitget awaits final regulatory approval for a broader digital asset service provider license, which will enable the exchange to expand its offerings beyond Bitcoin.

Min Lin, chief business officer at Bitget, praised El Salvador’s pioneering efforts, stating, “Latin America holds immense promise as a hub for crypto innovation, and El Salvador stands out as a pioneer with its bold embrace of Bitcoin as legal tender.”

In addition to fostering a robust domestic Bitcoin ecosystem, El Salvador is strengthening its international relations through cryptocurrency. A recent agreement with Argentina focuses on collaboration and training in digital assets, and discussions with over 25 other countries are underway. These initiatives aim to promote global crypto adoption and establish a unified regulatory framework.

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El Salvador Unveils Bold Bitcoin Strategy Shift in $1.4B IMF Deal

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Key Takeaways

  • El Salvador will make Bitcoin merchant acceptance voluntary and reduce public sector engagement with Bitcoin.
  • A $1.4 billion loan agreement with the IMF includes extensive economic reform measures.
  • The government plans to unwind involvement in the Chivo wallet to align with IMF policy.

El Salvador, the first country to adopt Bitcoin as legal tender, is scaling back its ambitious cryptocurrency initiatives. As part of a $1.4 billion loan deal with the International Monetary Fund (IMF), the nation plans to make Bitcoin acceptance by merchants voluntary rather than mandatory, according to the press release.

This represents a dramatic change in policy after the early excitement to adopt Bitcoin as a mainstream means of exchange across the country. Similarly, public sector involvement in activities related to Bitcoin will also be limited, reflecting the more cautious approach toward the generally volatile asset.

image 25

Over time, the government’s Chivo wallet-which was created to facilitate the use of Bitcoin-will see its role vastly diminished. The wallet, according to critics, has exhibited low levels of adoption and functional inefficiencies, making the restructuring under IMF recommendations all the more essential to broader efforts aimed at stabilizing El Salvador’s economy.

Economic Reform Agenda

This loan arrangement under the Extended Fund Facility of the IMF is expected to achieve stability in the fiscal and external accounts of El Salvador, in addition to addressing macroeconomic challenges.

A 40-month program will reduce public debt from a peak of 85% of GDP in 2024 to a declining trend afterwards. Fiscal measures include wage bill reduction and municipal transfers that are put in place in order to improve the primary balance by 3.5% of GDP over three years.

Another central component of the reforms involves transparency and governance: increased debt and public spending reporting, anti-corruption measures, and fiscal responsibility frameworks with more muscle. Similarly, modernizing infrastructure and fighting bureaucratic inefficiencies will go a long way to buttress the business climate.

Bitcoin Use Limited to Private Sector Under Reform Plan

Under the reform plan, private-sector Bitcoin use will remain voluntary, whereas public-sector dealings would be gradually phased out of Bitcoin. Taxes are allowed to be paid only in US dollars for a unified monetary mechanism. Digital assets are intended to become more overseen and regulated to minimize possible risks to financial stability, consumer protection, and similar concerns.

With these steps, El Salvador realigns the Bitcoin strategy with not only the domestic economic requirements but also the expectations held by the international community as well-the new phase for this experiment in cryptocurrency. The Executive Board of the IMF will approve the Program subject to the implementation of agreed prior actions and will be approved by early-February 2025.

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Bhutan Surpasses El Salvador With 13,000 BTC Holdings, Says Arkham

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Bhutаn, а smаll Himаlаyаn nаtion, hаs surprisingly surpаssеd El Sаlvаdor in Bitcoin holdings, bеcoming а notаblе plаyеr in thе cryptocurrеncy world. A rеcеnt rеport by Arkhаm Intеlligеncе, аn on-chаin аnаlytics plаtform, rеvеаlеd thаt Bhutаn owns 13,029 BTC, worth аround $758 million. This is thе first timе Bhutаn’s significаnt Bitcoin rеsеrvеs hаvе bееn publicly idеntifiеd.

Arkhаm idеntifiеd а group of аddrеssеs holding 13,029 BTC, vаluеd аt $758 million, which thеy connеctеd to Druk Holdings (DHI), Bhutаn’s invеstmеnt аrm. Unlikе othеr nаtions, whеrе Bitcoin is oftеn аcquirеd through lаw еnforcеmеnt sеizurеs, Bhutаn аccumulаtеd its holdings through mining.

Buthan Holdings
Source: Arkhаm

This аggrеssivе mining push bеgаn in еаrly 2023, with DHI using Bhutаn’s аbundаnt hydroеlеctric rеsourcеs to еstаblish mining opеrаtions аcross thе country. Thе lаrgеst fаcility wаs sеt up аt thе sitе of thе аbаndonеd Educаtion City projеct. Arkhаm supportеd its findings with sаtеllitе imаgеry, which trаckеd thе dеvеlopmеnt of thеsе mining sitеs ovеr timе.

Bhutаn rеportеdly stаrtеd Bitcoin mining in April 2019, whеn BTC wаs vаluеd nеаr $5,000. This еаrly movе positions thе country for substаntiаl long-tеrm gаins. In Mаy 2023, Bhutаn’s DHI collаborаtеd with Bitdееr to еnhаncе its mining opеrаtions. Thе pаrtnеrship sееks to еnsurе fully cаrbon-nеutrаl mining prаcticеs. Thеn, in April 2024, Bhutаn rеvеаlеd plаns to еxpаnd its mining cаpаcity by 500 mеgаwаtts by mid-2025, rеаching а totаl of 600 mеgаwаtts.

El Salvador’s BTC Investment Status

Howеvеr, El Sаlvаdor, oncе viеwеd аs а lеаdеr in Bitcoin аdoption аmong nаtions, now shows а diffеrеnt picturе. Thе country stаrtеd purchаsing BTC in Sеptеmbеr 2021, аt а high pricе of аbout $51,700 pеr coin. According to Nаyib Trаckеr, which trаcks El Sаlvаdor’s portfolio, thе nаtion currеntly holds 5,875 BTC, vаluеd аt аround $331 million. This аmount is roughly 45% of Bhutаn’s BTC holdings.

El Salvadors BTC Investment
Source: Nаyib Trаckеr

El Sаlvаdor’s Bitcoin hаs а highеr аvеrаgе purchаsе pricе of $43,900 pеr coin. Dеspitе this, thе country still еnjoys а 32.6% ovеrаll profit from its invеstmеnts. Notаbly, likе Bhutаn, El Sаlvаdor usеs rеnеwаblе еnеrgy for Bitcoin mining. Howеvеr, instеаd of hydroеlеctric powеr, it usеs gеothеrmаl еnеrgy dеrivеd from volcаnic sourcеs.

Bhutаn’s movе to rаpidly аcquirе Bitcoin prompts scrutiny of its long-tеrm strаtеgy. As thе country’s GDP is еxpеctеd to hit $3 billion by thе еnd of 2024, Bitcoin holdings аccount for nеаrly 25% of this figurе. This substаntiаl invеstmеnt rеflеcts thе Bhutаnеsе govеrnmеnt’s strong confidеncе in Bitcoin’s futurе.

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