El Salvador is under renewed international examination for its ongoing adoption of Bitcoin as part of its economic strategy.
On Tuesday, the International Monetary Fund (IMF) announced that it had formalized a staff-level agreement with the Salvadoran government during the initial review of a $1.4 billion extended loan program.
While commending El Salvador for its advancements in fiscal reforms and overall macroeconomic stability, the IMF emphasized its intention to “ensure” that the government’s total Bitcoin holdings remain unchanged.
This announcement, which follows protracted negotiations, highlights the IMF’s efforts to balance support for El Salvador’s economic goals with necessary restrictions regarding its prominent Bitcoin initiatives. The IMF indicated that while some risks tied to the country’s crypto adoption have lessened, ensuring stability necessitates stricter controls.
As part of the agreement, El Salvador has also pledged to eliminate public sector involvement in its state-run Bitcoin application, Chivo wallet, by the end of July.
El Salvador’s Bitcoin Holdings Continue to Grow Despite IMF Guidelines
This development comes on the heels of remarks from Economy Minister Maria Luisa Hayem, who reiterated in April that Bitcoin remains a priority for the government. Speaking at the Web Summit in Rio de Janeiro, she affirmed that the nation is still accumulating Bitcoin, despite the stipulations set forth by the IMF program.
Since finalizing the agreement in December 2024, El Salvador has reportedly added at least 20 Bitcoin to its national treasury.
As of May 2025, the country holds approximately 6,190 BTC, valued at an estimated $675 million, following its latest purchase on May 28. With Bitcoin prices experiencing significant increases this year, the nation enjoys unrealized gains exceeding $350 million, as per government data.
IMF Encourages Limited Crypto Engagement as El Salvador Commits to Reforms
El Salvador made headlines in 2021 as the first nation to recognize Bitcoin as legal tender, a decision that faced significant backlash from multilateral financial institutions such as the IMF. Negotiations regarding financial assistance stagnated for several years as the IMF pressured the country to rethink its cryptocurrency stance. However, the recent agreement reflects a more pragmatic approach, allowing for limited cryptocurrency involvement while urging broader economic accountability.
To secure the next tranche of $120 million in funding, the Salvadoran government has agreed to enhance fiscal consolidation, increase bank liquidity requirements, and pursue reforms in civil service and pensions. The IMF emphasized that this agreement remains contingent upon executive board approval and depends on the country fulfilling previously agreed-upon actions.
Although the restriction on Bitcoin holdings may displease cryptocurrency advocates, the Salvadoran administration appears resolute in its commitment to furthering its digital asset experiment, albeit within the framework of international oversight.
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