Bukele Rejects IMF Stipulations, Vows Persistence in El Salvador's Bitcoin Policy
The Skirmish Over Crypto: El Salvadorean President Fights IMF's Bitcoin Restrictions
El Salvador's leader, Nayib Bukele, has publicly clashed with the International Monetary Fund (IMF) on the terms of a $1.4 billion loan agreement, refusing to cease Bitcoin purchases as the global financial body demands.
"This ain't stopping in April, June, or December," Bukele scribbled on Twitter, leaving little room for compromise following the IMF's latest requirements detailed in its March 2025 country report.
The IMF has drafted new rules intending to institute "continuous quantitative performance criteria" with a "maximum of 0" on government Bitcoin acquisitions. These stringent measures compel El Salvador to halt Bitcoin buying to receive funding installments over an extended period, or risk losing the Extended Fund Facility program.
The deal enforces the liquidation of the Fidebitcoin trust fund by July 2025, the winding down of El Salvador’s participation in the Chivo wallet system, and the publication of government Bitcoin wallet addresses.
Bukele's resilience coincided with the Bitcoin Office adding another BTC to El Salvador's national reserves on Tuesday, bringing the country's BTC holdings to a staggering 6,101 BTC or $510 million, as per Arkham Intelligence data.
Despite criticisms surrounding Bukele's governance, the president has received endorsement from Bitcoin advocates like Michael Saylor, the chairman of Strategy. "Bitcoin's march forward is unstoppable," Saylor posted on Twitter in response to Bukele's announcement.
The contest between El Salvador's Bitcoin aspirations and the IMF's guidance is not new. Previously, the IMF urged El Salvador to revoke Bitcoin's legal tender status, citing dangers to financial stability and consumer safeguards after the country approved its use in September 2021.
In October last year, during negotiations for the loan, the IMF suggested limiting the scope of the country's Bitcoin Law, strengthening regulatory frameworks, and reducing public sector exposure to Bitcoin.
This confrontation comes as El Salvador is also working on a $1 billion economic stimulus plan to breathe life into its ailing economy, which could indirectly nudge Bitcoin adoption dynamics.
Edited by Sebastian Sinclair
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Insights:
- The IMF's new conditions compel El Salvador to halt Bitcoin purchases by the government public sector to receive funding in tranches, potentially impacting Bitcoin adoption.
- Reduced public sector support for Bitcoin might decrease its integration in El Salvador's economy.
- Private sector entities might continue purchasing Bitcoin, maintaining some activity despite public sector constraints.
- Public institutions are advised to limit their use of Bitcoin, and taxes are to be paid in US dollars instead.
- Only about 11% of registered Bitcoin businesses are operational, indicating a challenge in achieving widespread Bitcoin adoption.
- President Bukele continues to promote Bitcoin as part of his economic strategy despite the IMF's conditions.
- The $1 billion economic stimulus plan could indirectly influence Bitcoin adoption dynamics in El Salvador.
- There is speculation about a potential rollback of Bitcoin’s legal tender status, with a law set to take effect on April 30.
- Financing the country's Bitcoin acquisitions has become an issue amidst a standoff between El Salvador's President, Nayib Bukele, and the International Monetary Fund (IMF).
- In the IMF's March 2025 country report, stricter measures were outlined, mandating a "maximum of 0" on government Bitcoin purchases to secure funding installments.
- The IMF is urging El Salvador to halt Bitcoin purchases to avoid losing its Extended Fund Facility program, a possible blow to El Salvador's Bitcoin aspirations.
- On Tuesday, another BTC was added to El Salvador's national reserves, boosting the country's Bitcoin holdings to an impressive 6,101 BTC or $510 million.
- The IMF's recommendations also include the liquidation of the Fidebitcoin trust fund and the winding down of the Chivo wallet system.
- President Bukele's resilience in continuing Bitcoin purchases garnered support from Bitcoin advocate Michael Saylor, who endorsed El Salvador's Bitcoin strategy.
- The IMF has previously urged the revocation of Bitcoin's legal tender status due to concerns over financial stability and consumer protection.
- As El Salvador works on a $1 billion economic stimulus plan, the indirect effects on Bitcoin adoption dynamics could potentially foster increased use of Bitcoin in the country.
