El Salvador Amends Its Bitcoin Law Under the IMF Agreement
El Salvador's legislature amended the country's Bitcoin Law, making private-sector acceptance voluntary and reducing the government's mandatory role in Bitcoin as part of an agreement with the IMF. The changes materially rolled back the state-led model introduced in 2021.
El Salvador's Legislative Assembly approved amendments to the country's Bitcoin Law on January 29 as part of the government's agreement with the International Monetary Fund. The reform passed overwhelmingly and changed some of the most consequential elements of the 2021 legal-tender experiment.
The amendments made private acceptance of Bitcoin voluntary rather than mandatory and reduced the degree to which the state was required to facilitate Bitcoin use. Contemporary descriptions differed over whether Bitcoin should still formally be called legal tender after the changes, so the more precise historical description is that the mandatory state-led model was materially rolled back.
The reform did not ban Bitcoin. Salvadorans remained free to hold, transact and build businesses around it, and the government continued to promote the country as a Bitcoin-friendly jurisdiction. But the legal architecture had changed: compulsory acceptance and direct state involvement were no longer being pursued in the same form.
For Bitcoin history, the event was a milestone because El Salvador had been the first country to adopt Bitcoin as legal tender in 2021. January 2025 marks the first major statutory retreat from that pioneering national model.