Agreement between El Salvador and the IMF (at end of this post)

It’s really a battle between ledgers: Bitcoin vs USD. Legal Tender and Taxes are the two control points of any state entity. When you don’t issue your own currency, or your debt is denominated in a foreign currency your bargaining position is severely weakened, as is the case for El Salvador. Eventually an equilibrium point will be found.

Agreement text:

“Digital assets. The potential risks of the Bitcoin project will be diminished significantly in line with Fund policies. Legal reforms will make acceptance of Bitcoin by the private sector voluntary. For the public sector, engagement in Bitcoin-related economic activities and transactions in and purchases of Bitcoin will be confined. Taxes will only be paid in U.S. dollars and the government’s participation in the crypto e-wallet (Chivo) will be gradually unwound. Transparency, regulation, and supervision of digital assets will be enhanced to safeguard financial stability, consumer and investor protection, and financial integrity.”