Bitcoin Is Part of Plan to Get IMF-Approved $1.3 Billion for El Salvador: Bloomberg

Bitcoin Is Part of Plan to Get IMF-Approved $1.3 Billion for El Salvador: Bloomberg

According to a Bloomberg article, the International Monetary Fund has approved a $1.3 billion loan for El Salvador. Bitcoin adoption was one of the reasons that persuaded the IMF to provide the loan to this Central America country.

NEW: El Salvador's embrace of Bitcoin is no hurdle to accessing aid from the IMF—in fact it's part of the pitch via @crypto— Bloomberg Crypto (@crypto) October 19, 2021

IMF considers lending El Salvador $1.3 billion

President of the country’s central bank, Douglas Rodriguez, stated in an interview that the government had stressed to the IMF that Bitcoin adoption is likely to be more beneficial for the country that they had initially planned for.

The reason for this is that Rodriguez reckons that Bitcoin’s volatile price that is on the rise at the moment can help the country’s economy to rise this year higher than forecasts expect it to – more than nine percent.

He added that the only risks for the economy he sees here are upside risks. This was one of the arguments given by El Salvador to the IMF when discussing a $1.3 billion loan for the country.

In November, the IMF will come up with the recent review of the country’s economics and finance and will return to the discussion regarding the loan.

In June, the IMF warned that Bitcoin adoption may cause financial and regulatory issues for El Salvador. Moody’s Investor Service warned that using BTC as a legal tender may prevent getting the loan from the IMF.

Starbucks and McDonalds start accepting Bitcoin

By adopting Bitcoin as legal means of payment, the government of El Salvador intended to help the three quarters of the country’s population, who are unbanked, to gain access to banking services and include them in the financial system.

Salvadorans are now using government-built Chivo wallet that comes with $30 in Bitcoin for everyone. Businesses, such as McDonald’s, Starbucks and local stores as well, have started selling their goods and services for BTC.

The government also plans to use Bitcoin as a platform for remittances to give up leveraging such giants as Western Union and MoneyGram. These payment giants have been withdrawing $400 million from El Salvador’s economy on remittance fees every year. That is 1.5 percent of El Salvador’s GDP.

Bitcoin spikes above $62,000

On October 15, the flagship cryptocurrency soared above the $62,000 level for the first time since April, when the all-time high of $63,850 was reached.

The rally took place on the expectations of the SEC approving a Bitcoin futures ETF at the end of October. Indeed, today a ProShares Bitcoin ETF is to start trading on the New York Stock Exchange under the BITO ticker.

Thus, the price remains at $62,075. Many are expecting the world’s leading crypto to surpass the April all-time high soon and step well above the $64,000 level.