Bitcoin News Today: El Salvador's Bitcoin Purchases Halted Since January, IMF Confirms

El Salvador has been under scrutiny for its Bitcoin purchases, with the International Monetary Fund (IMF) confirming that the country has not made any new Bitcoin purchases this year. This revelation contradicts the government's repeated claims of accumulating one Bitcoin per day, raising questions about transparency and honesty.

Since the beginning of the year, El Salvador's government, including the National Bitcoin Office, had been announcing daily Bitcoin purchases. These announcements were widely circulated on social media and by crypto news outlets. President Nayib Bukele himself reconfirmed the initiative on March 4, with the Bitcoin Office later claiming that the country’s Bitcoin holdings were more than 6,100 coins. However, the IMF's report on July 15 revealed that no such purchases had occurred.

The IMF's report indicated that the public sector’s Bitcoin holdings have remained unchanged since December of last year, when El Salvador received a $1.4 billion loan through the IMF’s Extended Fund Facility (EFF). The increases in wallet balances that caused the hype were merely funds being consolidated from multiple government-controlled wallets. The illusion of increased Bitcoin holdings likely came from movements between internal wallets, creating a fake image of daily purchases without representing actual market activity or fresh investments with public funds.

Minor fluctuations in deposits to the government’s Chivo Bitcoin wallet were also resolved internally without further public spending. While numbers may have shifted on paper or in digital wallets, El Salvador made no genuine Bitcoin buys at all this year. This revelation comes as a surprise, given President Bukele's passionate advocacy for Bitcoin and his portrayal of El Salvador as a trailblazer in digital currency adoption. In 2021, El Salvador became the first country to make Bitcoin legal tender. However, after financial pressure and negotiations with the IMF, the government revised its stance early this year.

Under the terms of its IMF agreement, El Salvador was required to halt all new Bitcoin purchases with taxpayer money and scale back its public involvement in the crypto space. Despite this, Bukele and the Bitcoin Office continued to imply that accumulation was ongoing. Even after the IMF sent a reminder in March to honor the agreement, Bukele responded defiantly, posting, “No, it’s not stopping… and it won’t stop in the future.” However, the latest IMF report confirms that he eventually complied with the loan terms, at least in practice.

The IMF’s findings confirm that El Salvador is keeping up with the terms of the loan. However, the fallout from this blatant lie may be long-lasting. The idea that the government misled the public and the crypto community could damage its reputation and affect its future crypto-related moves. The controversy highlights the delicate balance between political rhetoric and economic reality, as well as the importance of transparency in government actions.