El Salvador said on Thursday it would keep buying bitcoin, possibly at an accelerated pace, a day after the government reached a financing agreement with the International Monetary Fund that had said it should limit its exposure to the cryptocurrency.
Stacy Herbert, El Salvador’s national bitcoin office director, wrote on X that bitcoin would remain legal tender in the Central American country, and that the government would keep adding to its strategic reserves.
On Wednesday, El Salvador struck a $1.4 billion loan deal with the IMF, as part of which the government of President Nayib Bukele agreed that it would scale back its bitcoin policies. The deal specified that tax payments will only be made in the other official tender, the U.S. dollar.
IMF spokesperson Julie Kozack said on Thursday that planned legal reforms in El Salvador would make acceptance of bitcoin by the private sector voluntary.
The government’s announcement that it would make more bitcoin purchases “might be just a way to counter any negative blowback” from a perceived diminished status of the cryptocurrency in El Salvador, said Eugene Epstein, head of trading and structured products for North America at Moneycorp in New Jersey.
“Given the size and likely the terms of the IMF deal, it was probably worth for (Bukele) to do that.”
El Salvador owns 5,968 coins, valued at $594 million. Bitcoin has rallied in recent days after U.S. President-elect Donald Trump reiterated plans for a strategic reserve for the cryptocurrency, similar to a strategic oil reserve.
In September 2021, El Salvador became the first country to make the cryptocurrency a legal tender, alongside the dollar. That caused friction with the IMF, which warned of financial and legal risks that it recently said “have not materialized.”