The International Monetary Fund (IMF) has formally approved a $1.4 billion Extended Fund Facility arrangement for El Salvador. This approval imposes constraints on the country’s Bitcoin adoption strategy.
The 40-month program, which received final approval in late February 2025, includes specific provisions that limit government engagement in crypto. However, it still allows private sector participation to continue on a voluntary basis.
Despite these new restrictions, El Salvador continues to add Bitcoin to its national reserves. This move highlights the tension between international financial orthodoxy and the country’s digital asset ambitions.
IMF Loan Agreement and Bitcoin Restrictions
According to the official announcement, the IMF has required El Salvador to implement legal reforms that make Bitcoin acceptance voluntary in the private sector. Tax payments must now be made exclusively in US dollars. This new policy reverses the previous one, which allowed tax settlement in Bitcoin.
The agreement further stipulates that the El Salvadoran government must gradually unwind its participation in the Chivo Digital wallet. Chivo Digital is a state-backed Bitcoin wallet system central to the country’s cryptocurrency adoption strategy.
Under the deal, the government must halt taxpayer funding for the Chivo wallet by July 2025. The IMF views these requirements as necessary risk management measures.
El Salvador’s Continued Bitcoin Accumulation
Despite the restrictive conditions imposed by the IMF agreement, El Salvador has shown no signs of abandoning its Bitcoin accumulation strategy. On March 3, 2025, the country purchased 5 Bitcoin in a single day as the cryptocurrency market experienced a temporary dip. This purchase brought the country’s total Bitcoin holdings to 6,100 BTC.
The National Bitcoin Office of El Salvador publicly announced earlier that the country accumulated 21 BTC in just one week and 60 BTC in the preceding days. This purchasing pattern suggests that El Salvador is exceeding its commitment to purchasing “one Bitcoin a day.”
El Salvador’s continued Bitcoin purchases while simultaneously agreeing to IMF restrictions create a complex policy landscape. The country has effectively rolled back certain aspects of its Bitcoin legislation. It has removed the requirement for businesses to accept the cryptocurrency as a means of payment.
However, Bitcoin maintains some form of legal status in the country. Bitcoin law in the country creates a somewhat difficult situation. Bitcoin is described as “legal tender” but without the traditional requirement that it be accepted for all debts.
The cryptocurrency market has shown limited reaction to the IMF’s restrictions on El Salvador. Bitcoin prices have maintained their relative stability since the last decline. The country’s approach to these restrictions will likely influence how other nations balance cryptocurrency innovation with international financial obligations in the coming years.
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