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El Salvador to scale back Bitcoin dreams to seal $1.3B IMF deal
Central American nation to make acceptance of cryptocurrency voluntary to unlock international lending
El Salvador expects to reach agreement with the IMF in the next two to three weeks on a $1.3bn loan programme in return for changes to its pioneering use of bitcoin as legal tender and reductions in government deficits, according to two people close to the talks. The IMF opposed El Salvador’s adoption of the digital currency, citing risks to financial stability and integrity, and has urged the Bukele government to stop accepting cryptocurrency as legal tender. The government would also commit to reducing the budget deficit by 3.5 percentage points of GDP over three years with a mix of spending cuts and tax rises, passing an anti-corruption law and increasing reserves from $11bn to $15bn, one of the people close to the talks said.
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