IMF Releases $139M to El Salvador, Still Pushes Country to Scale Back Bitcoin

IMF approves funds but demands Bitcoin pullback

The International Monetary Fund approved a $139 million payment to El Salvador on Friday, while simultaneously urging the country to reduce its involvement in Bitcoin activities.

The IMF statement acknowledged that El Salvador’s economy has performed strongly, citing improvements in security and investor confidence. But it also flagged that the country had not met certain performance requirements related to Bitcoin accumulation.

The fund said it granted waivers for the missed targets “based on strong corrective measures and renewed commitments” from El Salvador.

Bitcoin accumulation disputes surface

The IMF and El Salvador remain at odds over whether the government is still buying Bitcoin. In September, the IMF stated that El Salvador was not purchasing the cryptocurrency, attributing any holdings to private donations. The country’s Bitcoin Office has repeatedly denied this, saying it does buy Bitcoin.

The disagreement traces back to a 2022 pledge by President Nayib Bukele that the country would buy one Bitcoin per day. The source of funding for those purchases was never clearly explained, and it has remained unclear whether the buys were actually happening.

What the IMF is asking for

According to the IMF’s latest statement, the Salvadoran government’s involvement in Bitcoin-related activities is being unwound. The fund added that “no further Bitcoin accumulation is envisaged beyond the documented donations.”

El Salvador made Bitcoin legal tender in 2021, a move that drew sharp criticism from the IMF and other international institutions at the time. The country also gifted Bitcoin to its citizens and launched a government wallet to encourage everyday use of the cryptocurrency.

Past loan conditions shaped the current deal

The two sides entered a $1.4 billion loan agreement in late December, with the IMF asking El Salvador to scale back certain aspects of its Bitcoin strategy as part of the deal.

In 2024, Bukele admitted that Salvadorans were not using Bitcoin for purchases the way officials had hoped, though he continued to claim the government was still accumulating the cryptocurrency.

Why this matters for El Salvador’s Bitcoin experiment

The IMF’s latest stance signals continued pressure on El Salvador to step away from active Bitcoin accumulation, even as it recognizes the country’s broader economic progress. The waiver arrangement suggests the fund is willing to work with El Salvador but wants clear limits on how much the government participates in the Bitcoin market.

What’s still unclear

It remains unconfirmed whether El Salvador is still purchasing Bitcoin with public funds or solely through private donations, as the government and the IMF give conflicting accounts. No timeline was provided for when the unwind of state Bitcoin activities is expected to be completed.

Source

• Bitcoin Magazine