El Salvador’s Bitcoin reserve is facing renewed accounting scrutiny after the International Monetary Fund concluded its 2025 Article IV consultation and first review under the country’s Extended Fund Facility arrangement on June 27, 2025.
The IMF’s review marks a critical checkpoint in the ongoing tension between El Salvador’s sovereign Bitcoin strategy and the transparency standards required by its international lender. The consultation comes as part of a broader extended financing arrangement that ties continued IMF support to specific policy commitments, including how the country accounts for its digital asset holdings. For related coverage, see El Salvador Expands Bitcoin Holdings Despite IMF Pressure.
Why accounting, not adoption, is the pressure point
The distinction matters. The IMF’s concerns have shifted from whether El Salvador should hold Bitcoin to how it reports those holdings. Sovereign reserve assets typically follow established disclosure, valuation, and audit standards that allow creditors and international institutions to assess fiscal risk. For related coverage, see Conor McGregor Proposes Irish Bitcoin Reserve Initiative.
El Salvador has made public announcements about Bitcoin purchases over the past several years, but the gap between purchase announcements and independently verifiable reserve reporting has drawn repeated questions. As earlier coverage of El Salvador’s BTC consolidation claims highlighted, the country’s reported holdings have not always aligned with what outside observers can confirm on-chain.
For the IMF, this is not an ideological objection to Bitcoin. It is a practical concern about whether a borrowing nation’s fiscal position can be accurately assessed when a portion of its reserves sits in a volatile, inconsistently reported asset class.
What the EFF review means in practice
The Extended Fund Facility is a multi-year lending arrangement with built-in review milestones. Each review requires El Salvador to demonstrate compliance with agreed conditions before additional disbursements proceed. The completion of this first review signals that the IMF found sufficient progress on some fronts, but the consultation language around Bitcoin-related fiscal transparency remains a focal point.
This dynamic echoes a pattern seen across earlier rounds of IMF scrutiny of El Salvador’s Bitcoin policy, where the fund has consistently pushed for tighter controls on how public funds are used for cryptocurrency purchases. The country has at times expanded its Bitcoin holdings despite IMF pressure, creating a recurring cycle of tension and negotiation.
The accounting question also extends beyond El Salvador. The IMF’s engagement with Pakistan on Bitcoin-related energy proposals shows the fund is developing a broader framework for how member nations interact with digital assets under lending arrangements.
What comes next
Subsequent EFF reviews will likely intensify pressure on reserve reporting. If El Salvador is required to adopt more granular disclosure standards for its Bitcoin holdings, including custody arrangements, valuation methodology, and reporting frequency, it could set a precedent for other sovereign Bitcoin holders.
The next signals to watch are the specific conditions attached to future EFF disbursements and whether El Salvador adjusts its public reporting through its official Bitcoin office to meet IMF expectations. Whether the country continues accumulating Bitcoin or shifts toward consolidating and transparently reporting existing holdings will depend on how much fiscal flexibility the IMF demands in exchange for continued support.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
