El Salvador has rescinded Bitcoin’s full legal tender status to secure a $3.5 billion deal with the International Monetary Fund (IMF). The agreement necessitated making Bitcoin acceptance voluntary in the private sector, limiting public sector Bitcoin participation, and privatizing the Chivo wallet. Reactions among Bitcoin advocates are mixed; while some perceive this as a temporary setback, others believe Bitcoin adoption had never been robust. Critics, like former tech director Monica Taher, argue the initial goals of financial freedom were unmet due to the lack of educational initiatives about Bitcoin for the population. She noted that the maximalist approach deterred foreign investment, with 2024 seeing El Salvador receiving the least foreign investment in Central America, affected by governance issues and human rights concerns. Despite concerns over adoption rates and the state of the local Bitcoin ecosystem, some proponents remain optimistic, advocating for grassroots efforts to sustain Bitcoin culture and innovation in the country.

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