El Salvador to limit state Bitcoin involvement under IMF agreement
El Salvador and the International Monetary Fund say negotiations over the country’s Bitcoin policy and the divestment of the state-run Chivo wallet have reached an advanced stage.
The talks are tied to unlocking funding under a $1.4 billion IMF loan program aimed at supporting El Salvador’s economy, reports Crypto News.
According to an official IMF statement published on Dec. 23, discussions now focus on selling the Chivo wallet and reducing the government’s direct involvement in Bitcoin-related infrastructure. The IMF has framed these steps as necessary to improve transparency, protect public funds and reduce fiscal and financial risks. Negotiations had stalled for years after El Salvador adopted Bitcoin as legal tender in 2021. That decision prompted repeated IMF warnings about volatility, consumer protection and macroeconomic stability. A staff-level agreement reached in late 2024 reopened the door to funding.
Economic reforms unlock growth optimism
As part of the agreement, El Salvador committed to scaling back its Bitcoin strategy in the public sector, including making Bitcoin acceptance voluntary for businesses. The government also agreed to limit Bitcoin’s role in tax payments and reduce state exposure to crypto infrastructure. In return, the IMF acknowledged that Bitcoin-related risks are being mitigated and praised the country’s broader reform agenda. The fund now projects real GDP growth of about 4% this year, citing improved investor confidence, record remittances and rising investment.
The IMF added that growth prospects for next year also look strong. These assessments mark a shift from earlier, more confrontational stances between the two sides. Still, continued compliance will be key to releasing future tranches of IMF funding.
El Salvador maintains a pro-Bitcoin stance
Despite concessions to the IMF, El Salvador has not abandoned its broader pro-Bitcoin vision. The government recently completed its largest single-day Bitcoin purchase, adding 1,090 BTC to its reserves. Total holdings now stand at roughly 7,475 BTC, valued at more than $650 million at current prices.
The country has also moved to strengthen its crypto-friendly framework through new legislation, including an Investment Banking Law passed in August. That law allows specialized firms to offer Bitcoin and other digital assets as core financial services. El Salvador continues to market itself as a global crypto hub, attracting firms such as Tether, which recently relocated its headquarters to San Salvador. Together, these moves suggest the country is balancing IMF demands with a long-term commitment to Bitcoin adoption.
Recently we wrote that Metaplanet approved a sweeping overhaul of its capital structure, giving Japan’s largest corporate Bitcoin holder new tools to raise funds through dividend-paying preferred shares.
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