IMF Praises El Salvador Economy, Continues Bitcoin Skepticism

IMF Approves Funds, Presses for Bitcoin Rollback

The International Monetary Fund (IMF) approved a $139 million disbursement to El Salvador on Friday, acknowledging positive economic performance in the Central American nation. However, the IMF simultaneously continues to push for a reduction in the government’s involvement with Bitcoin (BTC).

El Salvador adopted Bitcoin as legal tender in 2021, a move that drew criticism from the IMF and other financial institutions. The country was simultaneously negotiating a loan agreement with the IMF at the time.

The IMF noted that El Salvador’s economy has “exceeded expectations,” citing improvements in security and investor confidence. Despite this progress, the IMF stated that certain performance criteria related to Bitcoin accumulation were not met, requiring waivers based on corrective measures.

The IMF reported in September that El Salvador appeared to have halted using public funds to acquire Bitcoin, relying instead on private donations. President Nayib Bukele announced in 2022 a plan to purchase one Bitcoin daily, but the funding source and actual implementation of this plan remained unclear. The IMF now states that no further accumulation is planned beyond documented donations.

Initial efforts to incentivize Bitcoin usage among citizens, including a state-sponsored wallet and Bitcoin gifts, have not resulted in widespread adoption for everyday transactions, as acknowledged by President Bukele in 2024. Despite this, the government maintained its position of accumulating BTC.

El Salvador and the IMF initially agreed to a $1.4 billion loan in December, contingent on scaling back certain aspects of the country’s Bitcoin strategy.

Source: Bitcoin Magazine