El Salvador continues to add Bitcoin to its reserves, even after signing a $1.4 billion loan agreement with the International Monetary Fund (IMF) that restricts public sector Bitcoin purchases. This move highlights the country’s strong commitment to Bitcoin amid financial scrutiny and international pressure.
The IMF Loan and Bitcoin Restrictions
In December 2024, El Salvador secured a $1.4 billion loan from the IMF. A key condition of the deal was to stop public sector Bitcoin accumulation and reduce government involvement in Bitcoin-related projects like the Chivo wallet. The IMF’s goal was to minimize financial risks tied to Bitcoin’s price swings and protect macroeconomic stability.
How El Salvador Continues Buying Bitcoin
Despite the IMF’s restrictions, El Salvador found a way to keep buying Bitcoin legally. The government’s Bitcoin Office operates outside the official fiscal sector. This means its Bitcoin purchases are not counted under the IMF’s public sector restrictions.
- The Bitcoin Office buys small amounts of Bitcoin daily.
- These purchases don’t violate the loan’s terms because they are technically outside the public sector.
- Rodrigo Valdes, IMF’s Western Hemisphere Department Director, confirmed that El Salvador is meeting the loan’s “non-accumulation” condition for the fiscal sector.
Since the loan agreement, El Salvador quietly added dozens of Bitcoins, including 7 BTC in April 2025 and 8 BTC after an IMF review in May 2025.
Current Bitcoin Holdings and Financial Impact
El Salvador now holds about 6,200 BTC, worth over $674 million as of mid-2025. However, Bitcoin’s price volatility has caused some losses:
- The country faced a $40 million loss in early 2025 due to Bitcoin’s price drop.
- Still, since adopting Bitcoin in 2021, El Salvador’s holdings have generated significant unrealized profits.
IMF’s Position and Ongoing Tension
The IMF acknowledges El Salvador’s progress on fiscal reforms but remains concerned about the Bitcoin strategy. It insists:
- No increase in total Bitcoin holdings by government entities.
- The public sector must end involvement in Bitcoin wallets by July 2025.
El Salvador insists Bitcoin accumulation is vital for financial inclusion and attracting investment.
Summary Table
| Aspect | Details |
| IMF Loan Amount | $1.4 billion |
| IMF Condition on Bitcoin | Halt public sector Bitcoin accumulation by Dec 2025; wind down Chivo wallet by July 2025 |
| El Salvador Bitcoin Office | Operates outside fiscal sector; continues small BTC purchases |
| Bitcoin Holdings (mid-2025) | ~6,200 BTC, worth over $674 million |
| Recent Purchases | 7 BTC in April 2025; 8 BTC in May 2025 |
| IMF’s Stance | Monitoring closely; insists on no increase in government BTC holdings |
| Financial Impact | $40 million loss in 2025 due to BTC price volatility; overall unrealized profit since 2021 |
Key Takeaways
- El Salvador uses a legal loophole to keep buying Bitcoin without breaking IMF loan terms.
- The Bitcoin Office’s purchases are outside the public fiscal sector.
- The IMF is aware and monitoring but accepts this technical compliance.
- Bitcoin accumulation remains a core part of El Salvador’s economic strategy.
- Bitcoin’s price swings create financial risks despite long-term gains.
FAQs
Q: Why does the IMF want El Salvador to stop buying Bitcoin?
- A: The IMF sees Bitcoin as a financial risk that could hurt the country’s economy and credit rating.
Q: How does El Salvador keep buying Bitcoin without breaking the loan agreement?
- A: By making purchases through the Bitcoin Office, which is separate from the public sector covered by the IMF.
Q: Has El Salvador stopped buying Bitcoin completely?
- A: No, small purchases continue through the Bitcoin Office.
Q: How much Bitcoin does El Salvador hold now?
- A: About 6,200 BTC, worth over $674 million as of mid-2025.
Q: Will the IMF take action if El Salvador keeps buying Bitcoin?
- A: The IMF is watching closely but has accepted El Salvador’s current approach. Future actions depend on ongoing talks.
