Summary
Brief report confirming El Salvador’s Congress voted 55-2 on January 29, 2025 to amend the Bitcoin Law, making acceptance of Bitcoin voluntary rather than mandatory. The reform reversed the core element of the 2021 legal tender designation and was driven by IMF loan conditions ($1.4 billion Extended Fund Facility).
Key Points
- Congress voted 55-2 to remove mandatory Bitcoin acceptance requirement.
- Bitcoin acceptance by businesses is now voluntary.
- Amendment approved January 29, 2025.
- Change required by IMF as condition of a $1.4 billion loan agreement reached December 2024.
- Congress dominated by President Bukele’s New Ideas Party — the vote was not contested.
Newsletter Angles
- The lopsided 55-2 vote illustrates how thoroughly Bukele controls Salvadoran politics — the reversal wasn’t democracy correcting itself, it was Bukele personally accepting a tradeoff (Bitcoin mandate for IMF money).
- The IMF’s ability to dictate domestic monetary policy to a sovereign nation — specifically removing a crypto law — is a striking demonstration of international financial institution power.
- Voluntarism vs. mandate: the experiment’s failure is now confirmed in law. If the mandate was necessary to drive adoption, voluntary acceptance will produce near-zero usage.
Entities Mentioned
- El Salvador — country reversing its Bitcoin mandate
- Nayib Bukele — president whose party controls Congress; architect of reversal
- IMF — conditioned the loan on this specific legal change
Concepts Mentioned
- El Salvador Bitcoin Experiment — the experiment’s formal end point
- Stablecoin Legislation — IMF as gatekeeper of monetary policy experiments
Quotes
“The reform was approved by Congress on 29 January, with 55 votes in favour and just two against.”
“The amendment responds to requirements set by the International Monetary Fund as part of a US$1.4 billion loan agreement reached in December 2024.”
Notes
Short news item. Confirms the legal mechanics of the reversal. Note that this is distinct from the Fitch upgrade (which followed the IMF deal announcement in December) — the legal amendment itself passed in January 2025.