El Salvador Pauses Bitcoin Purchases in Public Sector to Comply With IMF Loan Terms
Highlights
- The IMF states that El Salvador has back-pedaled on its public sector Bitcoin accumulation.
- El Salvador is adjusting its Bitcoin acquisition strategy to comply with IMF loan requirements.
- The country is still accumulating Bitcoin through alternative funding channels.
Fresh reports from the International Monetary Fund (IMF) confirm that El Salvador is adhering to its loan conditions. A major requirement involves halting Bitcoin purchases using public funds, though President Nayib Bukele remains determined to navigate around these restrictions.
El Salvador Halts Bitcoin Accumulation to Comply with IMF Loan Conditions
Reports from a press briefing by the IMF’s Western Hemisphere Department reveal that El Salvador has paused its Bitcoin purchases using public sector funds. Rodrigo Valdes, the IMF’s Director of the Western Hemisphere Department, confirmed that the government’s shift in approach is aimed at meeting the terms of its loan agreement.
As part of a $1.4 billion loan deal, the IMF mandated that El Salvador cease public sector Bitcoin accumulation. While President Nayib Bukele initially resisted this requirement, Valdes has confirmed that the government is now adhering to the agreement.
Valdes reassured that El Salvador remains fully compliant with its loan obligations, dispelling any rumors of violations. He emphasized, “I can confirm that they continue to comply with their commitment of non-accumulation of Bitcoin by the overall fiscal sector, which is the performance criteria that we have.”
In addition to halting public sector Bitcoin purchases, the IMF noted that El Salvador is also making progress in areas like fiscal transparency and structural reforms. With Bitcoin prices nearing $100,000, the country’s holdings of 6,158 BTC are valued at approximately $583 million.
Nayib Bukele Continues Daily Bitcoin Accumulation
Despite the ban on public sector Bitcoin purchases, El Salvador continues to accumulate Bitcoin at a steady pace. Data from the National Bitcoin Office shows that the country is buying one Bitcoin per day, effectively sidestepping the IMF’s restrictions.
Rather than relying on public funds for Bitcoin purchases, President Bukele is exploring alternative funding sources. He has made it clear that the country’s Bitcoin accumulation will persist, despite IMF pressure to limit its options.
Although the National Bitcoin Office has not disclosed the source of funds for these daily BTC acquisitions, speculation suggests that non-public sector entities are backing the purchases. One theory is that the government is using profits from its Strategic Bitcoin Reserve, with an average purchase price of around $44,000 per Bitcoin. Other nations, inspired by El Salvador’s approach, are considering establishing their own Strategic Bitcoin Reserves, with Samson Mow making a case for Japan.
In addition to advancing financial inclusion and reducing dependency on the dollar, President Bukele aims to leverage Bitcoin for a range of economic benefits. Cathie Wood’s Ark Invest has predicted that Bitcoin could soar as high as $1.5 million per BTC by 2030, potentially boosting the value of El Salvador’s holdings to unprecedented levels.
