World's first Bitcoin nation scales back crypto dream
El Salvador has struck a $1.4bn (£1.1bn) loan deal with the International Monetary Fund (IMF) after agreeing to scale back its controversial bitcoin policies.
The global lender said risks related to the adoption of the world's largest cryptocurrency had eased now that businesses will be allowed to decide whether or not to accept bitcoin.
In 2021, El Salvador became the first country in the world to make bitcoin legal tender.
This week, the cryptocurrency briefly hit a fresh record high of more than $108,000.
The potential risks of the Bitcoin project will be diminished significantly in line with Fund policies," the IMF announcement said.
"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."
The deal, which is aimed to help support El Salvador's economy, still needs to approved by the IMF's executive board.
The IMF had opposed the Salvadorean President Nayib Bukele's crypto-friendly policies, warning they could become an obstacle to it offering financial assistance.
Still, Bukele celebrated on social media as bitcoin rallied after Donald Trump's US election victory in November.
Earlier this month, as the price of bitcoin topped $100,000 for the first time, Bukele said in a social media post that his country's holdings in the cryptocurrency had more than doubled in value.
He also blamed his political opponents for causing many Salvadorans to miss out on bitcoin's rise.
The cryptocurrency has rallied since Donald Trump's election victory on the 5 November.
The incoming Trump administration is seen as being far more friendly towards cryptocurrencies than President Joe Biden's White House.
On Thursday, the cryptocurrency retreated along with global stock markets after the US Federal Reserve signalled a slower pace of interest rate cuts next year.
Bitcoin is currently trading at around $100,000.
Bitcoin hits new record high of more than $106,000
Bitcoin has surged to a new record high, extending a rally that has seen the cryptocurrency's price rise by more than 50% since Donald Trump's victory in the 5 November election.
The world's largest cryptocurrency briefly passed $106,000 (£83,890), before falling back to around $105,000 in Asia trade on Monday.
The incoming Trump administration is seen as being far more friendly towards cryptocurrencies than the Biden White House.
On Thursday, the US president-elect reiterated that he is considering creating a national stockpile of the digital currency, similar to the country's strategic oil reserve.
The Bitcoin rally since the election has been parabolic and the FOMO - or fear of missing out - rally is gathering momentum," Peter McGuire from trading platform XM.com told the BBC.
"Many investors believe $120,000 is achievable by the end of the year and then in 2025 there's talk of greater than $150,000 by mid-year".
Earlier this month, Trump named Silicon Valley entrepreneur David Sacks as his artificial intelligence (AI) and cryptocurrency tsar.
Mr Sacks is a former PayPal executive and a close friend of Trump adviser and mega-donor Elon Musk.
Trump has also said he would nominate pro-cryptocurrency Washington attorney Paul Atkins as the new head of the Wall Street regulator, the Securities and Exchange Commission (SEC).
Last month, the SEC's current head, Gary Gensler, said he would resign from the role on the day of Trump's inauguration, on 20 January next year.
"I thank President Biden for entrusting me with this incredible responsibility. The SEC has met our mission and enforced the law without fear or favour," Mr Gensler wrote on the social media platform X.
Trump had previously revealed plans to sack Mr Gensler on "day one" of his new administration after the SEC chairman took legal action against cryptocurrency firms, sparking controversy in some quarters.