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El Salvador's Bitcoin Purchases Stopped, IMF Confirms
Recent claims by El Salvador that it has been buying one Bitcoin daily throughout 2023 have been contradicted by the International Monetary Fund (IMF). According to the IMF, no new Bitcoin acquisitions have been made by the government, despite public assertions.
A report released on July 19 revealed the details, sourced from the IMF’s annual economic review, known as Article IV, dated July 15. The findings indicate that El Salvador ceased Bitcoin purchases following the approval of a $1.4 billion Extended Fund Facility (EFF) in December 2024, contrary to ongoing government claims of cryptocurrency accumulation.
Apparent Bitcoin Holdings Growth Tied to Wallet Transfers
The IMF's report clarified that the perceived rise in El Salvador’s Bitcoin holdings was due to internal movements between government-managed wallets rather than new market acquisitions. Nevertheless, on July 18, El Salvador’s official Bitcoin Office publicly reiterated its position, insisting that additional Bitcoin purchases had been made.
The analysis from the IMF attributes these wallet movements to internal reconciliations rather than taxpayer-funded cryptocurrency investments. Even minor balance changes in the government-supported Chivo wallet reportedly stemmed from consolidation processes. External dashboards, mistakenly interpreting these movements as new purchases, may have contributed to the discrepancy.
Analysts Uncover Evidence of Halted Bitcoin Buys
Notable pro-Bitcoin analyst Magoo PhD weighed in on the situation through platform X (formerly Twitter). He suggested that the El Salvadoran government halted its Bitcoin purchases quietly, adhering to IMF stipulations under the terms of the EFF loan.
“Evidence shows that the IMF effectively forced El Salvador to stop buying Bitcoin in exchange for a fiat loan. Footnote #9 [of the IMF report] reveals they’ve been merely consolidating wallets while maintaining the illusion of continued Bitcoin purchases,” Magoo PhD explained, backing his statement with IMF documentation.
IMF Commends El Salvador for Regulatory Commitment
The IMF report also highlighted significant policy changes made by El Salvador, contributing to the mitigation of risks associated with Bitcoin adoption. The government has pledged to neither accumulate Bitcoin voluntarily nor issue debt instruments tied to cryptocurrency. This includes refraining from tokenized debt options, which could inflate public liabilities.
In line with these commitments, El Salvador aims to exit public sector involvement in Chivo wallet operations by the end of July and is taking active steps toward dismantling Fidebitcoin, the government’s Bitcoin trust fund. These measures align with the IMF’s transparency and fiscal discipline requirements.
Bitcoin as Legal Tender Reversed Amid IMF Loan Agreement
El Salvador made history in 2021 by becoming the first nation to legally adopt Bitcoin as an official currency, a bold move that captured global attention. However, this policy was reversed in January 2025 to secure borrowing under the IMF’s program conditions.
The IMF’s current report confirms the government has adhered to its earlier agreement to halt Bitcoin acquisitions using public funds. Additionally, El Salvador remains on track to eliminate its public sector role in Chivo wallet management by July 31, while phasing out Fidebitcoin to meet transparency objectives outlined in the IMF arrangement.
Crucial Next Steps to Fulfill IMF Program Goals
As El Salvador continues progressing under the IMF program, the organization has acknowledged the government’s commitment to meeting its financial and structural benchmarks. However, the upcoming weeks will serve as a critical period for assessing whether El Salvador successfully concludes the Chivo wallet operations and fully dismantles the Bitcoin trust fund.
These actions will be pivotal not only for enhancing fiscal transparency but also for maintaining long-term IMF financial support. Global stakeholders and cryptocurrency enthusiasts alike are closely monitoring the situation to determine the broader implications of El Salvador's decisions.
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