IMF approves $139 million for El Salvador, seeks smaller state Bitcoin role

The International Monetary Fund said in a statement Friday that it approved a $139 million disbursement to El Salvador. The IMF also sought to reduce the state's involvement in Bitcoin-related activities. The IMF said economic activity exceeded expectations, supported by sustained improvements in security and investor confidence. The IMF said macroeconomic imbalances continued to be addressed.

The IMF said certain performance criteria were not met, including those concerning Bitcoin accumulation. The IMF said waivers were granted based on strong corrective measures and renewed commitments. The IMF said El Salvador's state involvement in Bitcoin-related activities was being reduced. The IMF said no further bitcoin accumulation was envisaged beyond documented donations.

The IMF said in September that El Salvador was not buying bitcoin. However, El Salvador's Bitcoin Office has repeatedly said the country buys the cryptocurrency. The IMF also said in September that El Salvador had, at least for some time, received bitcoin through private donations rather than using public funds.

El Salvador's President Nayib Bukele said in 2022 that the country would buy one bitcoin per day. The source of the money was never clear. Whether Bukele was actually buying bitcoin was also never clear. Bukele admitted in 2024 that citizens were not using the cryptocurrency to buy things as expected. However, Bukele repeatedly boasted that the government was still accumulating bitcoin.

El Salvador and the IMF entered a $1.4 billion loan agreement at the end of December. The IMF asked El Salvador to scale back certain aspects of its Bitcoin strategy. El Salvador made Bitcoin legal tender in 2021, drawing opposition from the IMF and other major institutions. El Salvador was negotiating a development loan with the IMF at that time. El Salvador's state gave citizens bitcoin in 2021 and introduced a wallet to encourage cryptocurrency use in the dollarized country.