- IMF imposes conditions on El Salvador’s Bitcoin policies.
- Government Bitcoin purchases are now halted.
- Chivo wallet public sector unwinds by July 2025.
The agreement is critical as it marks a shift in El Salvador’s Bitcoin strategy, with potential implications for global crypto-dependent economies.
IMF’s $1.4 billion extended fund facility
accompanies international commitments totaling $3.5 billion to support El Salvador’s economy. President Nayib Bukele, known for making Bitcoin legal tender in 2021, is negotiating terms with the IMF.
Under this agreement, Bitcoin holdings freeze at approximately 6,190 BTC, valued around $675 million. New public sector acquisitions of Bitcoin are halted, impacting global views on government crypto strategies.
“Efforts will continue to ensure that the total amount of Bitcoin held across all government-owned wallets remains unchanged, consistent with program commitments…” — IMF Official, International Monetary Fund
The immediate impact includes a possible reduction in Bitcoin’s market demands as El Salvador adjusts policies for financial security. The unwinding of the public sector’s involvement with Chivo wallet by July amplifies this shift.
The financial and policy changes represent a significant regulatory stance by the IMF on Bitcoin adoption by governments. Economists expect future regulatory landscapes in crypto economies to pivot towards such structured oversight.
Potential outcomes include increased investor caution regarding government-backed crypto initiatives. Capping efforts align with the IMF’s track record of limiting non-traditional exposures for financial stability. El Salvador’s ongoing commitment despite these limits will be keenly observed.
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