El Salvador’s ongoing love affair with Bitcoin is facing a new challenge. The International Monetary Fund (IMF) has agreed to release $120 million to the country following a review of its $1.4 billion loan agreement, but there’s a catch. The IMF has emphasized that El Salvador must curb its flirtation with Bitcoin, mandating the government to keep its digital holdings steady and withdraw from its involvement with the Chivo wallet by the end of July 2025.
IMF’s Conditional Green Light
The IMF’s decision, announced on May 27, 2025, underscores a delicate dance between financial support and cryptocurrency regulation. The $120 million disbursement is contingent on El Salvador adhering to the terms of the broader 40-month, $1.4 billion agreement hammered out last December. In essence, the IMF is urging El Salvador to hit the brakes on its Bitcoin buying spree—a request they’ve made before, to little effect.
“On Bitcoin, efforts will continue to ensure that the total amount of Bitcoin held across all government-owned wallets remains unchanged,” the IMF stated. The organization has consistently voiced its apprehensions about El Salvador’s ambitious crypto ventures, cautioning against further investments and activities related to Bitcoin. This cautious stance mirrors sentiments expressed by other global leaders, such as the Arizona Governor’s recent veto of a Bitcoin reserve bill, citing concerns over crypto as an ‘untested investment.’
Bukele’s Bold Bitcoin Bet
However, President Nayib Bukele seems unperturbed by the IMF’s warnings. Mere hours after the IMF’s pronouncement, El Salvador’s Bitcoin Office took to social media to trumpet another purchase of the digital currency. According to their tracker, the nation has amassed 30 BTC in the past month, bolstering its reserve to a staggering 6,190.18 BTC.
Bukele is doubling down on his Bitcoin strategy, asserting that the government will continue to acquire one Bitcoin per day to fortify the nation’s treasury. His audacious approach appears to be paying off—at least on paper. Just last week, Bukele announced on social media that the country’s Bitcoin treasury is sitting on an unrealized profit of $386 million, a remarkable 132% gain on its overall investment. This aggressive accumulation strategy is reminiscent of Metaplanet’s plans to raise $250M for Bitcoin strategy, signaling a broader trend of institutional interest in the cryptocurrency.
Navigating the Crypto Conundrum
The tug-of-war between El Salvador’s crypto aspirations and the IMF’s prudent stance raises intriguing questions about the future trajectory of the country’s economic strategy. Rodrigo Valdes, director of the Western Hemisphere Department at the IMF, noted in April that El Salvador is technically complying with the IMF’s performance criteria. But how long can the country dance on this razor’s edge?
Anndy Lian, an author and intergovernmental blockchain adviser, suggests that El Salvador might find a workaround by purchasing Bitcoin through non-government entities. This could enable Bukele to maintain his crypto course while ostensibly adhering to the IMF’s conditions—a savvy, if somewhat contentious, approach to sidestepping international scrutiny.
The Road Ahead
As the end of July deadline looms, all eyes will be on El Salvador to see if it can reconcile its Bitcoin ambitions with the IMF’s stipulations. The stakes are high: balancing the allure of crypto gains against the potential benefits of IMF support could define the country’s economic landscape for years to come.
What does this mean for the broader cryptocurrency market? El Salvador’s defiance might embolden other nations eyeing similar paths, while the IMF’s cautious stance could serve as a counterpoint for those advocating for regulatory oversight. The global crypto community will no doubt watch with bated breath as this compelling saga unfolds, raising questions about whether this bold experiment in digital currency can coexist with traditional financial governance.
Source
This article is based on: IMF says El Salvador to make ‘efforts’ to stop Bitcoin buys with $120M payments deal
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
