IMF Urges El Salvador to Halt Bitcoin Purchases

The International Monetary Fund (IMF) will strive to ensure “guarantees” that El Salvador’s government bitcoin reserves remain unchanged.

The organization announced that staff-level agreements have been reached for extended state financing. The IMF’s stance contradicts the efforts of the country’s president, Nayib Bukele, to increase the number of coins held.

In 2024, the parties reached an agreement that limited El Salvador’s acquisition of digital gold in exchange for a 40-month loan of $1.4 billion. Other organizations, including the World Bank, may also provide additional support, bringing the total package to approximately $3.5 billion.

A preliminary step for approval was the amendment of the bitcoin law. These amendments removed the mandatory acceptance of coins by private organizations and revoked its status as legal tender.

The fund’s program aims to address El Salvador’s macroeconomic and structural issues. The IMF believes that the country’s reserves of the first cryptocurrency pose a potential risk that “has not yet materialized.”

Despite the formal ban, El Salvador has continued to steadily increase its bitcoin holdings, reaching 6,190 BTC. The latest purchase was recorded on May 28. In March, Bukele promised that purchases of digital gold would not cease.

Back in September 2021, El Salvador became the first country in the world to recognize bitcoin as legal tender. Services and merchants were required to accept the cryptocurrency. 

The government encouraged residents to use the Chivo wallet by paying $30 in digital gold for app registration. The state regularly purchased coins and engaged in mining.