Bitcoin in Governance: Trends and Realities

El Salvador Scales Back Bitcoin Plans for $1.3bn IMF Deal

El Salvador is within a chime of securing a $1.3 billion deal with the International Monetary Fund by promising to pare budget deficits and reconsider its policy on Bitcoin. It was also to make the use of Bitcoin optional, adopt anti-corruption laws, and build its financial reserves.

 

President Nayib Bukele is a hardline leader against crime, and his popularity has risen due to a reduction in violence and the attraction of investments. However, most Salvadorans prefer the US dollar, leaving the ambitious "Bitcoin City" plans unrealized. Better economic conditions and a sovereign bond rally point to progress for the country, though risks from the cryptocurrency experiment are far from over.

 

Vancouver Mayor Advocates Bitcoin to Tackle Inflation

Vancouver Mayor Ken Sim has floated the idea of including Bitcoin in the city's financial strategies and said that he wants taxes and fees in cryptocurrency. He added that Bitcoin would be a bulwark against inflation, shielding the city's purchasing power.

 

He cited successful adoption by other cities like Zug, Lugano, and El Salvador as proof that Bitcoin could be beneficial for them. The initiative intends to diversify reserves and stabilize finances against volatile fiat markets. This is a policy for which community input will be sought, particularly in the development of a report on its feasibility, associated risks, and benefits to be presented by the end of Q1 2025.

 

Conclusion:

Governments and cities worldwide are increasingly exploring Bitcoin as a tool for economic stability and growth. While El Salvador recalibrates its ambitious Bitcoin policies to secure international support, Vancouver considers adopting the cryptocurrency to combat inflation and diversify reserves. These contrasting approaches highlight both the promise and challenges of integrating digital assets into public financial systems.