TLDR
- The IMF has established new conditions requiring El Salvador to halt all Bitcoin acquisition and mining as part of a $1.4 billion loan agreement
- El Salvador must identify all government Bitcoin holdings by March and liquidate its Bitcoin trust fund by July 2025
- President Bukele publicly rejected these conditions, declaring “No, it’s not stopping” regarding the country’s Bitcoin strategy
- The loan terms forbid El Salvador from issuing any Bitcoin-related debt instruments or tokens
- Despite IMF requirements, El Salvador added another Bitcoin to its reserves, now holding 6,101 BTC valued at approximately $510 million
The International Monetary Fund and El Salvador are locked in a conflict over the country’s Bitcoin strategy. A recent IMF Staff Country Report demands the Central American nation end all Bitcoin accumulation. President Nayib Bukele has openly challenged these requirements.
The IMF’s new rules explicitly prohibit El Salvador from buying or mining Bitcoin. These conditions are tied to a $1.4 billion loan package. The agreement could help El Salvador access up to $3.5 billion in total funding from various organizations.
El Salvador’s economy shows mixed signals according to the IMF. Tourism is growing and security has improved. However, the country still faces large fiscal deficits and heavy debt burdens.
President Bukele’s relationship with the IMF has evolved. He initially dismissed their concerns about Bitcoin. Recently his government amended the Bitcoin Law to address some IMF worries.
Full compliance with the IMF terms is required by December 2025. The report targets Bitcoin’s legal tender status in El Salvador. It also mandates an end to any “voluntary accumulation of BTC” by the public sector.
Deadlines and Demands
By March’s end, El Salvador must provide a complete inventory of all government Bitcoin holdings. This includes details about wallets and ATMs operated by public entities like Chivo and the Bitcoin Management Agency.
The Bitcoin trust fund known as Fidebitcoin must be dissolved. This was previously used for purchasing Bitcoin. The government must also obtain an independent audit of Chivo’s financial statements by July 2025.
El Salvador’s ambitious Bitcoin Bonds project faces cancellation under the IMF terms. These bonds were intended to fund Bitcoin City and mining operations. The IMF has rejected this plan outright.
Under the agreement’s performance criteria, El Salvador cannot issue any debt or tokenized instruments linked to Bitcoin. This effectively blocks many of the country’s crypto-related development plans.
Bukele responded swiftly and firmly to these demands. “This all stops in April. This all stops in June. This all stops in December. No, it’s not stopping,” he posted on social media platform X.
“This all stops in April.” “This all stops in June.” “This all stops in December.”
No, it’s not stopping.
If it didn’t stop when the world ostracized us and most “bitcoiners” abandoned us, it won’t stop now, and it won’t stop in the future.
Proof of work > proof of whining https://t.co/9pC0PoY3YQ
— Nayib Bukele (@nayibbukele) March 4, 2025
The president backed up his words with action. El Salvador’s Bitcoin Office added another Bitcoin to the national reserves. The country now holds 6,101 BTC worth about $510 million.
Bukele has received support from prominent Bitcoin figures. Michael Saylor of Strategy publicly endorsed El Salvador’s stance. “Bitcoin adoption is unstoppable,” Saylor commented in response to Bukele.
The conflict has been building since 2021 when El Salvador adopted Bitcoin as legal tender. The IMF expressed concerns immediately. In 2022, they formally requested El Salvador revoke Bitcoin’s legal tender status.
Financial markets have noted the tension. Credit rating agencies lowered El Salvador’s ratings in 2022. This makes borrowing more expensive for the country.
El Salvador faces compliance reviews in June and September 2025. Failure to meet IMF conditions could result in the loss of the entire loan package. This would have serious economic consequences.
Bukele remains defiant despite these risks. “If it didn’t stop when the world ostracized us and most ‘Bitcoiners’ abandoned us, it won’t stop now,” he stated. He concluded with “Proof of work > proof of whining.”
The standoff represents a clash between traditional finance and cryptocurrency adoption. El Salvador pioneered national Bitcoin adoption. Now it must navigate pressure from established financial institutions.
The dispute highlights questions about monetary sovereignty. Can international organizations dictate a country’s currency policies? El Salvador’s case may set precedents for other nations considering crypto adoption.
For Bitcoin supporters, El Salvador represents an important test case. The outcome of this conflict may influence how other countries approach cryptocurrency in the future. Many are watching to see if a small nation can maintain its Bitcoin strategy against international pressure.
Both sides face difficult choices in the months ahead. El Salvador needs financial support but wants to maintain its Bitcoin position. The IMF seeks compliance but risks pushing El Salvador toward alternative funding sources.
This conflict extends beyond financial policies. It represents competing visions for the future of money and national sovereignty in the digital age. The resolution will likely influence global cryptocurrency adoption for years to come.
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