Salvador Bitcoin Policy Adjustment Insider: The Game of Compromise and Persistence

In early February 2025, a news report about El Salvador “canceling the Bitcoin legal tender status” quickly ignited the market, causing sharp fluctuations in cryptocurrency prices. As the first country in the world to adopt Bitcoin as legal tender, any adjustment to El Salvador’s Bitcoin policy is enough to sway market sentiment. However, behind this “misleading news” lies a more complex game of international politics and finance. What exactly happened? Has El Salvador truly changed its attitude towards Bitcoin?

Two-Year Tug-of-War Between IMF and El Salvador

In 2021, under the leadership of President Nayib Bukele, who strongly supported cryptocurrencies, El Salvador became the first country in history to adopt Bitcoin as legal tender. This bold move was seen as a milestone for cryptocurrencies entering the mainstream.

However, the International Monetary Fund (IMF) did not buy into this. Established in 1945 and alongside the World Bank as one of the world’s two major financial institutions, the IMF’s responsibilities include monitoring exchange rates and ensuring financial stability. The IMF considers El Salvador’s policies “highly risky,” potentially triggering a series of economic and financial issues.

Starting in 2023, the IMF began exerting continuous pressure on El Salvador. The turning point came in December 2024: El Salvador urgently needed a $1.4 billion loan from the IMF to push forward reforms, and the IMF linked the loan approval to policy adjustments, demanding that El Salvador amend Bitcoin-related laws by the end of January at the latest.

The True Story Behind the Legislation Passage

On January 29, 2025, the El Salvador Congress overwhelmingly approved the Bitcoin law amendments submitted personally by Nayib Bukele, with 55 votes in favor and 2 against. While the vote appeared swift and decisive, it was not an impulsive event.

A timeline review reveals that negotiations between the IMF and El Salvador had already begun from December 5 to 14, 2024. A team led by Luis Cubeddu, Deputy Director of the IMF Western Hemisphere Department, reached consensus with El Salvador’s delegation led by Raphael Espinoza, and a joint statement was issued on December 18. In other words, the amendment plan had been finalized long before the deadline, only awaiting formal approval.

Mainstream media outlets like Reuters followed up on this but did not cause significant market upheaval. The real “breaking point” occurred at the end of January, due to a shift in how some media outlets described the situation.

Media Discrepancies Trigger Market Reactions

According to the IMF’s official statement, the key points of the agreement were: the private sector would “voluntarily” accept Bitcoin (changing from mandatory to voluntary), the public sector would restrict Bitcoin use, taxes could only be paid in USD, and the government’s crypto wallet Chivo would be gradually phased out. In other words, the reforms were about “weakening” rather than “cancelling” Bitcoin’s legal status.

Stacy Herbert, Director of El Salvador’s Bitcoin Office (ONBTC), immediately clarified on social media: “Bitcoin will still be legal tender.” Legislator Elisa Rosales also stated that the goal of the reforms was to “ensure Bitcoin’s permanent status as legal currency.”

However, the headline from Spanish media outlet EL PAIS was “Nayib Bukele changes his mind and cancels Bitcoin’s legal tender status in El Salvador.” This more impactful statement was widely reposted, sparking panic selling in the market.

In fact, under the reforms of “non-mandatory acceptance” and “not as a means of tax payment,” Bitcoin indeed no longer fully exhibits all features of traditional legal tender. But both the IMF, El Salvador’s official statements, and international mainstream media emphasized that this was a “reform,” not a “cancellation.”

Has El Salvador Really Changed Its Attitude?

Despite being compelled to accept IMF policy adjustments, El Salvador’s actual actions tell a different story.

The day after the IMF statement (December 19), Stacy Herbert announced that El Salvador would accelerate Bitcoin purchases as strategic reserves. Subsequent actions confirmed this commitment: although the law was passed on January 29, El Salvador continued to buy Bitcoin.

According to official data from ONBTC, El Salvador currently holds 6,055 Bitcoins. More importantly, John Dennehy, founder of the local crypto company Mi Primer Bitcoin, stated: “El Salvador’s Bitcoin reserve plan will not change because of the IMF agreement.”

Truth and Insights

The core of this turmoil is El Salvador’s tactical adjustment under international financial pressure. President Bukele’s government meekly accepted the IMF’s demands—weakening Bitcoin’s mandatory status and government involvement—but simultaneously continued to increase Bitcoin holdings in the name of national reserves.

In other words, El Salvador is playing a long game: sacrificing short-term policy prestige to accumulate long-term strategic assets. Making concessions on policy while advancing on asset accumulation. The policy has been adjusted, but the strategic direction remains unchanged. This is not a “change of attitude,” but a “change of approach.”

For the Bitcoin market, what truly matters is not how the policy wording is expressed, but the firm actions behind El Salvador—this precisely demonstrates that even under international pressure, the country’s commitment to Bitcoin remains rock solid.