"IMF Clamps Down on El Salvador's Bitcoin Ambitions"
1min read The International Monetary Fund (IMF) has imposed new conditions on el Salvador's $1.4 billion Extended Fund Facility (EFF) loan, which was initially approved in December. These conditions include strict limitations on government Bitcoin activities and the retention of existing holdings. The IMF's deputy managing director and acting chair of the board, Nigel Clarke, stated that the program commitments will confine government engagement in Bitcoin-related economic activities and transactions.
The agreement, detailed in a March 2025 IMF Country report, imposes three key crypto-specific requirements. Firstly, a "continuous quantitative performance criteria" prohibits any new Bitcoin acquisitions by public sector entities, maintaining a "ceiling of 0" throughout the program period. Secondly, the Fidebitcoin trust fund must be liquidated by July 2025, and government participation in the Chivo wallet system must be terminated. Lastly, all government Bitcoin wallet addresses must be published, Chivo user funds must be segregated, and audited financial statements for crypto-related entities must be provided.
Amendments to El Salvador's Bitcoin Law, enacted in June 2021, are also underway. These amendments aim to clarify the legal nature of Bitcoin and remove the essential features of legal tender from the law. This will be achieved by eliminating the obligation for the public and private sectors to accept Bitcoin in transactions, making its acceptance by the private sector voluntary and restricting its use by the public sector.
El Salvador had previously scaled back its efforts to integrate Bitcoin in December 2024, and by January 2025, the country agreed to some of the terms to comply with the IMF. The IMF's use of the term "confined" in previous documents extends to El Salvador's Bitcoin purchases, according to Samson Mow, CEO of Bitcoin technology firm JAN3. Mow expressed his preference to hear the news from the Bukele administration rather than the IMF.
The IMF document also prohibits the issuance of any type of debt or tokenized instrument that is indexed to or denominated in Bitcoin. These restrictions are classified as "continuous quantitative performance criteria," making them mandatory rather than optional. Despite these restrictions, El Salvador's Bitcoin holdings reportedly stand at approximately 6,100 BTC, with a current value of roughly $510 million, following the purchase of another 5 BTC from Bitfinex.
El Salvador has progressively welcomed both crypto and 