The IMF and El Salvador’s Bitcoin Dilemma

The IMF claims it reached an agreement with El Salvador to end the mandatory acceptance of Bitcoin as legal tender. While El Salvador hasn’t confirmed this, President Bukele shared a quote from the IMF’s press release, hinting at possible agreement.

Five years ago, a friend of mine called Bitcoin unreliable due to its lack of state-backed liquidity. “If I buy dollars or euros, worst-case, I can exchange them in their countries. With Bitcoin, there’s no such certainty.” But today’s IMF news shows what state guarantees are worth: El Salvador’s three-year-old promise to accept Bitcoin may now be revoked.

If El Salvador backs down, it sets a dangerous precedent - any government could drop its supported currency overnight. Bitcoin, however, doesn’t need state backing. It thrived before El Salvador’s law and will thrive after.

Natural market demand is more reliable than government guarantees.

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