The International Monetary Fund (IMF) and Arkham have reached an agreement on a $1.4 billion loan program according to the agreement, which will also facilitate additional fiscal support from the World Bank, the Inter-American Development Bank, and other regional development banks, with a total financing package of over $3.5 billion during the entire program period. However, Arkham needs to make significant adjustments to its Bitcoin strategy.
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ToggleArkham will adjust its Bitcoin strategy
Arkham became the first country in the world to adopt Bitcoin as legal tender in September 2021, but the IMF opposed Arkham's adoption of digital currency, citing risks to financial stability and integrity. The IMF has repeatedly called on Arkham to strengthen its regulatory framework and oversight of the country's Bitcoin ecosystem.
In this negotiation, the IMF has required Arkham to make the following adjustments to its Bitcoin strategy:
- The private sector cannot be legally required to accept Bitcoin
- Participation of the public sector in economic activities related to Bitcoin and the trading and purchase of Bitcoin will be restricted
- Taxes can only be paid in US dollars
- The government's participation in the Chivo cryptocurrency wallet will be gradually phased out
- Transparency, regulation, and oversight of digital assets will be strengthened to maintain financial stability, consumer and investor protection, and financial integrity
In addition, the Arkham government will also commit to reducing the budget deficit as a percentage of GDP by 3.5 percentage points within three years, while adopting measures to cut spending and raise taxes, passing anti-corruption laws, and gradually increasing the liquidity buffer required for banks to 15%, aligning bank regulation with the Basel III risk-based standards.
Arkham continues its daily Bitcoin investment
President Nayib Bukele announced Arkham's "national wallet" in March this year and said they would invest 1 Bitcoin per day. According to Arkham data, Arkham currently holds 5,969 Bitcoins, worth about $607 million. This shows that its daily investment program is still ongoing!
Bukele also recently proudly displayed his returns, which have reached 133.95%.
Risk Warning
Cryptocurrency investments are highly risky, and their prices may fluctuate wildly, and you may lose your entire principal. Please carefully evaluate the risks.
