The International Monetary Fund (IMF) has firmly advised the El Salvador government against increasing its Bitcoin 
$76,467 holdings. In a recent announcement, an agreement was reached on the first review of a 40-month Extended Fund Facility program, with one of the key conditions being halting further Bitcoin purchases. This decision conflicts with President Nayib Bukele’s insistence on acquiring more Bitcoin, while IMF experts caution that the nation’s cryptocurrency stance could expose it to unforeseen currency and liquidity shocks. This situation underscores the tension between El Salvador’s ambitious cryptocurrency plans and its need for multilateral financing.
IMF’s Terms for El Salvador’s Economic Support
Last December, a $1.4 billion EFF package was signed to reduce the budget deficit, alleviate debt burden, and enforce structural reforms for sustainable growth. The legislative assembly swiftly incorporated the agreement into domestic law, modifying the Bitcoin Law to make BTC acceptance optional for the private sector.
In February, the IMF’s Board approved the first $120 million tranche, cautioning that although not yet realized, cryptocurrency assets could create vulnerabilities in the national balance sheet.
The total support amount is anticipated to increase to $3.5 billion, with contributions from entities like the World Bank. Along with typical fiscal discipline measures, the IMF required strict monitoring of government cryptocurrency transactions, including monthly data sharing, real-time reporting, and a promise to refrain from new purchases. The official delegation emphasized that cryptocurrency use would remain voluntary for citizens, reiterating the dollar as the main currency for national transactions.
The Uncertain Future of Bukele’s Bitcoin Strategy
Since March 2024, Nayib Bukele’s strategy of buying “one BTC per day” has been bolstering El Salvador’s digital treasury. A recent report showed that their portfolio holds unrealized gains exceeding $357 million.
Although Bukele did not directly address the IMF’s statement on halting Bitcoin acquisitions, his silent resharing of the announcement left public expectations ambiguous. Market observers are curious about how the president might balance his popular crypto policies without compromising IMF loans.
Upcoming evaluations by fund auditors will assess whether Bitcoin assets are accurately valued in the balance sheet, the cybersecurity of institutional wallets, and money laundering risk controls. If subsequent reviews are found lacking, credit installments may be suspended, complicating the refinancing of bonds due in 2026. Bukele’s administration is preparing to introduce alternative financing channels, such as Bitcoin bonds, to maintain economic independence.
