El Salvador has refrained from utilizing public funds to build up its bitcoin reserves since the International Monetary Fund conducted the most recent review of its loan program, the organization announced Thursday.
In Thursday’s report, the IMF stated that documentation supplied by the government indicates the Central American nation has instead acquired bitcoin exclusively through private donations. Furthermore, the organization noted that “no further Bitcoin accumulation beyond the documented donations is expected.”
Global attention turned to El Salvador in 2021 when it made history as the world’s first country to adopt bitcoin as legal tender. Although Salvadoran President Nayib Bukele announced in 2022 that the nation would purchase one bitcoin every single day, uncertainty persisted regarding the funding source and whether the purchases were actually occurring.
“Documentation has been provided verifying that Bitcoin accumulation since the first review reflects private donations and that no public resources were used,” according to the IMF release.
“Understandings were also reached on steps to modernize the legal, regulatory, and supervisory framework for digital assets and to further strengthen the governance and risk-management arrangements for public-sector crypto-asset holdings. Going forward, no further bitcoin accumulation beyond the documented donations is expected.”
The report also indicated that public involvement in the state-backed bitcoin wallet has significantly decreased, with operational control and majority ownership now transferred to a private operator.
To help drive domestic adoption of the cryptocurrency, El Salvador originally launched a state-sponsored wallet named Chivo for its citizens in 2021.
“IMF staff thank the Salvadoran authorities for the constructive discussions and excellent collaboration,” the document concluded.
Late in December, El Salvador finalized a $1.4 billion loan agreement with the IMF, though the financial institution requested that the nation dial back specific elements of its bitcoin strategy.
Major financial institutions, including the World Bank and the IMF, have frequently criticized President Bukele’s Bitcoin law, which mandated that businesses accept the cryptocurrency provided they possessed the necessary technological capabilities.
While President Bukele acknowledged in 2024 that citizens were not using the digital asset for daily purchases to the extent originally anticipated, he continuously bragged that the administration continued to accumulate crypto.
Following a massive government crackdown on notorious criminal organizations, murder rates across El Salvador have dropped dramatically. Having previously been recognized as the most dangerous location in the Americas, President Bukele is presently working to transform the nation into a technology hub.
As a result, cryptocurrency firms such as Tether have established operations in the capital city of San Salvador.
Frequently Asked Questions
Has El Salvador been buying Bitcoin with public money?
No. According to the IMF, El Salvador has not used public funds to accumulate bitcoin since the last review of its loan program, relying instead on private donations.
Will El Salvador continue buying Bitcoin?
The IMF report states that no further bitcoin accumulation beyond previously documented donations is expected.
What happened to El Salvador’s state-sponsored Bitcoin wallet?
Public participation in the Chivo wallet has largely wound down, and majority ownership and operational control have been handed over to a private operator.
Why did the IMF give El Salvador a loan?
El Salvador entered into a $1.4 billion loan agreement with the IMF at the end of December, which involved the country scaling back certain aspects of its bitcoin strategy.
