"El Salvador Halts Bitcoin Pursuit, IMF Deal Secures $1.4B"

The International Monetary Fund (IMF) has released a new Staff Country Report on El Salvador, advising the country to halt its Bitcoin accumulation efforts, both through purchasing and mining. The IMF also recommends that El Salvador liquidate the fund created for Bitcoin purchases and implement other essential changes beyond the Bitcoin Law amendments passed by the national congress in late January.

El Salvador has made significant strides in various areas, including improved security and a thriving tourism industry. However, the country still faces macroeconomic imbalances, high fiscal deficits, and substantial debt. The IMF's agreement provides El Salvador with $1.4 billion and could unlock up to $3.5 billion from multilateral organizations like the World Bank and the Inter-American Development Bank.

President Nayib Bukele has shifted his stance on the IMF, moving from mocking the fund's position on the Bitcoin Law to making adjustments to the law and agreeing to cease all public Bitcoin involvement, including El Salvador's Bitcoin accumulation. The IMF's new report states that the Bukele administration is focused on addressing pending macroeconomic and structural challenges and boosting economic growth under an IMF-supported program.

The agreement, announced in 2024, has now specified that El Salvador must fully comply by December 2025 and detail the changes to be implemented. The changes to the Bitcoin Law primarily concern its legal tender status, but the IMF emphasizes that the public sector must cease its "voluntary accumulation of BTC." This prohibition includes both purchasing and mining activities.

By the end of March, El Salvador is compelled to identify all the Bitcoin the administration has already accumulated, listing the wallet and ATMs of the public company Chivo, the Bitcoin Management Agency, the Bitcoin Office, the Lempa River Hydroelectric Power Plant executive board, and all other persons or organizations involved in Bitcoin in the public sector. The second review of this process will occur at the end of June.

The IMF's staff report details the changes to El Salvador's Bitcoin accumulation. The country must liquidate the Bitcoin trust fund Fidebitcoin, which was previously used to acquire BTC. Additionally, El Salvador is required to present Chivo's financial statements, audited by an independent crypto-experienced auditor, with this process and audit to be completed before July 2025 for its second review.

One of the most anticipated projects, the Bitcoin Bonds, intended to finance Bitcoin mining infrastructure and the development