Key Points
- The IMF approved an immediate disbursement of approximately $138 million to El Salvador under its $1.4 billion financing program.
- The country missed certain performance criteria, including requirements related to Bitcoin accumulation, but received waivers based on corrective measures and renewed commitments.
- El Salvador is expected to reduce state involvement in Bitcoin activities, strengthen crypto-asset regulation and improve transparency around public-sector digital asset holdings.
The International Monetary Fund has approved the immediate release of approximately $138 million to El Salvador after completing the second and third reviews of the country’s $1.4 billion financing program.
The IMF Executive Board completed the reviews under El Salvador’s 40-month Extended Fund Facility on Thursday. While the country missed certain performance criteria, including those related to Bitcoin accumulation, the IMF granted waivers based on what it described as strong corrective measures and renewed commitments.
The decision allows the financing program to continue while maintaining conditions aimed at reducing the Salvadoran government’s direct involvement in cryptocurrency-related activities.
Bitcoin Accumulation Remains Under IMF Scrutiny
Bitcoin accumulation was among the areas in which El Salvador did not meet certain performance criteria under the program.
The IMF said, however, that documentation provided by Salvadoran authorities showed that the increase in the country’s Bitcoin holdings after the first review did not result from additional purchases financed with public resources.
According to the IMF, the additional Bitcoin came from private donations. The explanation was intended to address questions surrounding the growth of El Salvador’s holdings following the first review of the financing program.
The lender said no further Bitcoin accumulation is envisaged beyond the documented donations.
Government to Reduce Bitcoin Involvement
The IMF said El Salvador would continue efforts to reduce the state’s involvement in Bitcoin-related activities while strengthening the regulatory and governance framework surrounding crypto assets.
The program also calls for greater transparency regarding public-sector cryptocurrency holdings.
The measures form part of broader efforts to align El Salvador’s digital asset policies with the conditions attached to its IMF financing arrangement.
Chivo Wallet Control Moves to Private Operator
The IMF also highlighted progress involving El Salvador’s Chivo Bitcoin wallet.
According to the lender, majority ownership and operational control of Chivo have been transferred to a private operator. The government retains a minority stake as well as custodial responsibilities.
The transfer represents another step toward reducing direct state involvement in Bitcoin-related infrastructure under the IMF program.
The development follows earlier scrutiny over the government’s role in cryptocurrency activities and how those activities fit within the conditions of the financing agreement.
Broader Reform Progress
Despite the missed performance criteria, the IMF said El Salvador had made progress across several other areas of its program.
These included financial-sector reforms, fiscal transparency and measures addressing anti-money laundering and counter-terrorist financing requirements.
The IMF’s decision to grant waivers reflects the lender’s assessment that corrective actions and renewed commitments were sufficient to allow the program to proceed.
The latest disbursement brings additional financing into El Salvador while maintaining the reform framework established under the $1.4 billion agreement.
Outlook
The IMF’s latest decision allows El Salvador to access approximately $138 million despite missed performance criteria, including those related to Bitcoin accumulation. The waivers are tied to corrective measures and commitments intended to keep the broader financing program on track.
For El Salvador’s cryptocurrency policy, the direction remains focused on reducing direct government involvement, strengthening regulation and increasing transparency around public-sector digital assets. The treatment of Bitcoin holdings and the continued transition of Chivo’s ownership and control will remain important elements of the program’s implementation.
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