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The vague language of El Salvador’s $1.4 billion deal with the IMF may imply that it might stop buying Bitcoin at some point, according to Samson Mow.
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El Salvador, the first country to adopt Bitcoin as legal tender, faces a complex regulatory shift following amendments to its Bitcoin law aimed at complying with an International Monetary Fund (IMF) loan agreement.
Bitcoin (BTC) ”both is and isn’t legal tender” in El Salvador after the government amended its Bitcoin law to comply with a deal pushed by the IMF, according to Jan3 CEO Samson Mow.
“The Bitcoin situation in El Salvador is complex, and there are many questions that still need to be answered,” Mow said in a post on X on Feb. 13.
Mow, an early Bitcoiner and advocate of nation-state BTC adoption, described El Salvador’s Bitcoin status question as a “glass is half full” situation.
Why is El Salvador amending its Bitcoin law?
El Salvador’s Bitcoin amendments came about three years after the nation adopted its Bitcoin law in September 2021, officially recognizing BTC as legal tender.
As part of the law, the Salvadoran government mandated that all local businesses accept Bitcoin as a means of payment to promote its adoption. The government made its first BTC purchase in September 2021.
The IMF, an international organization operating within the United Nations, has long opposed El Salvador’s Bitcoin experiment, repeatedly warning about financial stability risks.
In December 2024, the IMF struck a $1.4 billion deal with the Salvadoran government, offering the loan in exchange for the country scaling back its Bitcoin adoption.
Salvadoran lawmakers subsequently approved legislation to amend its Bitcoin law by late January 2025 as part of the deal.
Contradictory amendments
“The amendments to the Bitcoin Law are very clever and allow for compliance with the IMF agreement while allowing the El Salvador government to save face,” Mow said on X.
Still, the amendments are prone to contradictions, with the law no longer classifying Bitcoin as a currency but at the same time making it “voluntary legal tender,” he noted.
Source: Samson Mow
“Removing the word currency makes the Bitcoin Law a lot less useful,” Mow continued, adding that the passed amendments also prohibit tax payments and essentially any government fees with BTC.
Future Bitcoin buying by El Salvador in question
Another important takeaway from the Bitcoin Law amendments is that the changes prohibit the Salvadoran government from “touching BTC,” Mow wrote.
Article 8 of the amendments also stipulated that the state doesn’t need to help facilitate BTC transactions, paving the way for a potential phase-out or sale of El Salvador’s government-provided crypto wallet, Chivo.
Separately from the Bitcoin Law changes, there are still questions pending from the agreement between the IMF and El Salvador, Mow said, referring to unclear wording of the agreement that was released on Dec. 18, 2024.
Related: El Salvador buys 12 Bitcoin in a day, bringing reserve to 6,068 BTC
He raised questions over the vague language regarding whether El Salvador would be allowed to continue stacking Bitcoin.
Source: Excellion (Samson Mow)
“I would assume that the government can continue to acquire Bitcoin as an asset since they are continuing with that, but it could also be that it may be stopped at a later time. It all depends on what ‘confined’ means. We’ll see,” Mow wrote.
“Political parties in power change. Laws can be changed easily. What matters is real Bitcoin adoption — top-down or grassroots; the goal is real people understanding and using Bitcoin,” he concluded.
Magazine: How crypto laws are changing across the world in 2025
This article first appeared at Cointelegraph.com News
