Bitcoin News Today: El Salvador Halts Bitcoin Purchases Amid IMF Bailout

El Salvador, which made global headlines in 2021 by becoming the first country to adopt Bitcoin as legal tender under President Nayib Bukele’s leadership, has since seen a significant shift in its stance on cryptocurrency. The nation's bold vision of large-scale crypto adoption appears to be fading, with recent developments indicating a pivot towards economic pragmatism.

In November 2022, Bukele announced that El Salvador would begin buying 1 Bitcoin per day, and the country set up a National Bitcoin Office to coordinate crypto initiatives. These moves, along with Bitcoin's legal status, signaled the government's deep commitment to Bitcoin adoption. Bukele's pro-crypto and anti-establishment policies resonated with many Salvadorans, helping him secure a historic re-election in February 2024.

However, El Salvador's economy struggled under mounting debt and inflation. To stabilize finances, the government turned to the International Monetary Fund (IMF), which approved a $1.4 billion Extended Fund Facility in February 2025. The IMF made it clear that El Salvador must limit public-sector Bitcoin activity, including BTC purchases and transactions. Despite public claims by the government that it would continue buying Bitcoin, a July 2025 IMF report revealed a different story.

According to the IMF, El Salvador hasn’t purchased any new Bitcoin since December 2024—the same month IMF talks concluded. The report clarified that recent wallet activity was merely internal transfers, not fresh acquisitions. Additionally, Bitcoin quietly lost its legal tender status in January 2025, signaling a strategic backpedal.

These developments indicate a clear shift in El Salvador's priorities. The state-sponsored Chivo Wallet, which was a key component of the country's Bitcoin adoption strategy, is reportedly set to be privatized by the end of July 2025. Rumors also suggest that El Salvador may dissolve Fidebitcoin, the government-run Bitcoin trust, as part of its shift towards IMF compliance.

While El Salvador's leadership once stood firm on Bitcoin adoption, recent developments indicate a pivot toward economic pragmatism. The IMF bailout has reshaped national priorities, and Bitcoin is no longer center stage. Whether this marks the end or a pause in El Salvador’s Bitcoin journey remains to be seen. The nation's experience serves as a cautionary tale for other countries considering large-scale crypto adoption, highlighting the challenges and uncertainties that come with integrating cryptocurrency into national economies.