El Salvador has expanded its Bitcoin reserves, adding another coin on Wednesday, bringing the country’s total holdings to over 6,102 BTC. The National Bitcoin Office posted the update on X, doubling down on its plan to keep buying more Bitcoin.
The office said it “won’t stop stacking” digital assets, promising to acquire at least one more Bitcoin the next day.
IMF Loan Agreement Forces El Salvador to Scale Back Bitcoin Use
The latest acquisition follows the International Monetary Fund (IMF) approving a $1.4b, 40-month financial program for El Salvador.
As part of the agreement, Bitcoin’s role in the country’s economy has been downgraded. The cryptocurrency is no longer required for tax payments. Further, public acceptance remains voluntary—far from its intended role as a widely adopted legal tender when introduced in 2021.
A key condition of the IMF deal requires El Salvador to phase out government involvement in its state-backed Chivo Bitcoin wallet by July 2025.
The government is also prohibited from purchasing Bitcoin using public funds, effectively curbing further state-driven accumulation of the asset. However, Bitcoin acquired through law enforcement actions, such as seizures and forfeitures, remains exempt from these restrictions.
IMF Acknowledges El Salvador’s Bitcoin Purchases Remain Within Limits
Despite the IMF’s limitations, the Salvadoran government has continued adding to its Bitcoin holdings. Since the IMF board approved the agreement last week, El Salvador has acquired 12 additional BTC. The government’s current Bitcoin reserve is valued at about $550m, based on market prices.
An IMF spokesperson confirmed that El Salvador’s recent Bitcoin acquisitions align with the agreed program conditions.
“We consulted with the (Salvadoran) authorities, and they have assured us that the recent increase in Bitcoin holdings in the Strategic Bitcoin Reserve Fund is consistent with agreed program conditionality,” the spokesperson told Reuters.
IMF Loan Critical for El Salvador Amid Bitcoin Policy Uncertainty
El Salvador’s Bitcoin adoption, spearheaded by President Nayib Bukele in 2021, has remained a contentious issue. The IMF has repeatedly voiced concerns about the cryptocurrency’s volatility and its potential to destabilize the nation’s economy. The organization has also warned about legal and financial risks, including money laundering vulnerabilities and Bitcoin’s limited use in daily transactions, which it described as “marginal.”
The stakes are high for El Salvador. The $1.4b IMF loan, approved in Dec. 2024, is crucial for the country’s economic stability and could unlock an additional $3.5b from institutions like the World Bank and the Inter-American Development Bank.
With fiscal challenges and restricted access to external financing, non-compliance with the IMF’s conditions could put this funding at risk. The IMF will conduct its first compliance review in June 2025, meaning failure to adhere to the agreement could jeopardize future disbursements and broader financial support.
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