The IMF Prohibits The Accumulation Of Bitcoin In El Salvador

On March 3, 2025, the International Monetary Fund (IMF) approved an extended facility of 1.4 billion dollars for El Salvador, aimed at supporting the country’s economic reform program. This decision follows negotiations during which El Salvador agreed to modify its bitcoin policy to address the IMF’s concerns. However, the IMF prohibits the accumulation of bitcoin and many other measures.

The IMF demands the head of bitcoin to help El Salvador

In 2021, under the impetus of President Nayib Bukele, El Salvador became the first country to adopt bitcoin as legal tender. However, this initiative raised concerns among international financial institutions, notably the IMF, regarding potential risks to financial stability and consumer protection.

In order to meet the IMF’s requirements, El Salvador modified its bitcoin law in January 2025, as part of a 1.4 billion dollar financing agreement. And to push the envelope even further, the IMF recently added new constraints on Nayib Bukele’s country. Among others:

• Voluntary acceptance of bitcoin: Businesses will no longer be required to accept bitcoin as a means of payment. This measure aims to respect merchants’ choices and alleviate concerns related to cryptocurrency volatility.

• Reduction of bitcoin in the public sector: The government commits to limiting the voluntary accumulation of bitcoin by the public sector and to restricting the issuance of debts or instruments linked to BTC. This decision aims to minimize the state’s exposure to cryptocurrency market fluctuations.

• Regulation of public electronic wallets: The government’s official wallet, Chivo, will either be sold or abandoned. This measure reflects a desire to refocus public resources and to allow the private sector to innovate in financial services related to cryptocurrencies.

A well-thought-out strategy?

The agreement with the IMF is seen as a crucial step to bolster investor confidence and ensure the country’s economic stability. Furthermore, this extended facility could pave the way for further funding from other institutions such as the World Bank and the Inter-American Development Bank.

Despite these adjustments, bitcoin retains its status as legal tender in El Salvador and the government continues to believe in the potential of cryptocurrencies. However, in response to the IMF’s concerns, the country is now adopting a more cautious and balanced approach, seeking to leverage the benefits of BTC while mitigating associated risks.

The agreement between El Salvador and the IMF thus illustrates the challenges faced by countries seeking to integrate bitcoin or cryptocurrencies in general into their national financial system. It remains to be seen whether El Salvador will implement these new clauses or if the country will defy the IMF as it did in December 2024, by purchasing 1 million euros in BTC.