BUENOS AIRES, ARGENTINA – SEPTEMBER 30: President of El Salvador Nayib Bukele waves as he takes … [+]
The International Monetary Fund published a new Staff Country Report related to El Salvador, in which the fund states that El Salvador bitcoin accumulation needs to stop through both purchasing and mining. The country also should liquidate the fund created to buy, among other essential changes beyond the Bitcoin Law changes passed by the national congress at the end of January.
While El Salvador has made significant progress in several areas, it still faces challenges. Despite the improved security, a thriving tourism industry, and other positive developments, the country continues to grapple with macroeconomic imbalances, high fiscal deficits, and substantial debt. The IMF’s agreement provides El Salvador with $1.4 billion, and could unlock up to $3.5 billion from various multilateral organizations, such as the World Bank and the Inter-American Development Bank.
President Nayib Bukele has shifted his stance on the IMF, moving from mocking the fund’s position on the Bitcoin Law to making adjustments to the law and agreeing to cease all public Bitcoin involvement, including El Salvador bitcoin accumulation.
“The Bukele administration is intent on focusing its second mandate on addressing pending macroeconomic and structural challenges and boosting economic growth under an IMF-supported program,” the IMF said in the new report.
El Salvador Bitcoin Accumulation Is Over And No Bitcoin Bonds
Although the agreement was announced in 2024, doubts lingered about the implementation of the changes. The updated report now specifies that El Salvador must fully comply by December 2025 and detail what the changes will look. The changes to the Bitcoin Law primarily concerned its legal tender status, but the IMF emphasized that the public sector must cease its “voluntary accumulation of BTC.”
El Salvador bitcoin accumulation prohibition “includes purchase and mining.” By the end of March, the country is compelled to identify all the bitcoin the administration has already accumulated, listing the wallet and ATMs public company Chivo, the Bitcoin Management Agency, the Bitcoin Office, the Lempa River Hydroelectric Power Plant executive board, and all other person or organization involved in bitcoin in the public sector. The second review of this process will happen at the end of June.
IMF’s staff report details the changes to El Salvador bitcoin accumulation. No buying, and no … [+]
According to the report, El Salvador must liquidate the Bitcoin trust fund Fidebitcoin, which was previously used to acquire BTC. The country is also required to present Chivo’s financial statements, audited by an independent crypto-experienced auditor, with this process and audit to be completed before July 2025 for its second review.
One of the most anticipated projects was the Bitcoin Bonds, intended to finance Bitcoin mining infrastructure and the development of Bitcoin City. However, the IMF has now rejected these bonds.
To meet the IMF’s quantitative performance criteria, the fund explicitly states that the public sector is prohibited from issuing or guaranteeing “any type of debt or tokenized instrument that is indexed to or denominated in Bitcoin and implies a liability for the public sector.”
With the Bitcoin Law amendments and the announced end of El Salvador bitcoin accumulation, the narrative about Bitcoin and the Central American country is under a transformation.
