El Salvador Reaches New Agreement with IMF: Retains Bitcoin Holdings During Fiscal Reform
To secure a 40-month delayed loan from the International Monetary Fund (IMF), El Salvador has reached an agreement with the IMF.
Under the agreement, while retaining its existing Bitcoin holdings, El Salvador must freeze $675 million worth of Bitcoin reserves during the fiscal reform period and plans to gradually phase out the state-owned Chivo wallet by July.
However, the agreement is still subject to approval by the IMF Executive Board, contingent upon El Salvador meeting the agreed conditions first.
IMF officials noted that the country has made significant progress in implementing its economic reform program, successfully achieving several fiscal and reserve targets, while enhanced investor confidence and increased remittance inflows are driving the ongoing expansion of the Salvadoran economy. This series of actions has strengthened the country's governance and financial resilience reforms.
To address economic challenges, El Salvador will implement austerity measures, including reducing public wages, limiting regular expenditures, and planning reforms to the civil service and pension systems. Additionally, the upcoming Fiscal Sustainability Law will support these measures and increase central bank deposits to boost foreign exchange reserves.
Despite the progress made, the IMF has reiterated its concerns about El Salvador's Bitcoin strategy. The organization stated that it is working to ensure that the Salvadoran government does not increase its Bitcoin holdings. Furthermore, the IMF is taking measures to require El Salvador to gradually cease public sector participation in the Chivo wallet by the end of July.
As early as December 2024, El Salvador reached a $1.4 billion loan agreement with the IMF, which included terms to restrict El Salvador's cryptocurrency activities, requiring the private sector to voluntarily accept BTC and limiting public sector participation in relevant transactions.
To comply with the agreement, the Salvadoran Congress passed amendments to the Bitcoin Law to align with IMF regulations. In February 2025, the IMF Executive Board approved the financing agreement, allowing an initial disbursement of $120 million, with subsequent amounts requiring approval.
Despite facing restrictions from the IMF agreement, El Salvador continues to adhere to its strategy of purchasing one Bitcoin (BTC) daily. As of May 28, 2025, the country holds approximately 6,191 BTC, valued at around $672 million. Its president has also publicly stated that the country will not stop purchasing Bitcoin as a strategic reserve.
