El Salvador’s Bitcoin Plan Faces Examination from the IMF
The International Monetary Fund (IMF) has reiterated its request for El Salvador to maintain its current Bitcoin holdings.
In a communication dated May 27, the IMF stated that government-operated wallets should not expand their Bitcoin reserves and called on the nation to exit its association with the Chivo wallet by the end of July.
The global financial institution noted:
“Efforts will persist to ensure that the total quantity of Bitcoin in all government-held wallets remains unchanged, in alignment with program commitments, while also facilitating the reduction of public sector involvement in the Chivo wallet by the end of July.”
This instruction follows a staff-level agreement designed to release $120 million for El Salvador as part of a larger $1.4 billion lending package.
Nevertheless, the ultimate approval hinges on the IMF’s executive board and whether the nation adheres to its agreed-upon policy objectives.
El Salvador initially entered into the financing arrangement in December 2024, with a significant stipulation being to lessen the government’s direct engagement in Bitcoin-related enterprises.
El Salvador’s Bitcoin Strategy
In contrast, the Central American nation has been actively increasing its Bitcoin holdings over the recent months.
Notably, the government incorporated at least eight more BTC into its reserves just last week and displays no intention of tapering off.
The national Bitcoin office reported that the country now possesses close to 6,190 BTC. At current market valuations, this accumulation amounts to over $674 million, representing unrealized gains exceeding $200 million.
President Nayib Bukele, the key proponent of Bitcoin adoption in El Salvador, remains steadfast in his policy decisions.
He has rebuffed outside criticisms and consistently highlighted the financial benefits achieved through his administration’s Bitcoin-centric approach.
Stacy Herbert, who heads the Bitcoin office, echoed this sentiment, stating that the government is focused on developing the legal and financial frameworks essential for drawing in investment through the adoption of cryptocurrency.
She commented:
“We are dedicated to establishing the robust capital markets necessary for an economic transformation: through our proposed legislation aimed at attracting international investment and our initiatives to create the world’s first Strategic Bitcoin Reserve while advocating for a proactive government strategy of Bitcoin accumulation.”
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