- IMF requires El salvador to cease all Bitcoin accumulation activities including purchases and mining by December 2025.
- The country must liquidate its Bitcoin trust fund “Fidebitcoin” and provide audited financial statements for Chivo by July 2025.
- El Salvador is prohibited from issuing Bitcoin-backed bonds or tokenized instruments as part of the $1.4 billion IMF agreement that could unlock up to $3.5 billion from multilateral organizations.
El Salvador’s Bitcoin strategy is undergoing a dramatic shift as the International Monetary Fund’s latest Staff Country Report mandates the end of the nation’s Bitcoin accumulation efforts. The country must halt both purchasing and mining activities, liquidate its Bitcoin fund, and abandon plans for Bitcoin bonds as part of conditions attached to a $1.4 billion financing agreement.
The IMF’s report outlines specific requirements that President Nayib Bukele’s administration must implement by December 2025, marking a significant reversal from the country’s pioneering cryptocurrency stance. This comes after Bukele has shifted from mocking the IMF’s position on the Bitcoin Law to accepting fundamental changes to El Salvador’s crypto strategy.
“The Bukele administration is intent on focusing its second mandate on addressing pending macroeconomic and structural challenges and boosting economic growth under an IMF-supported program,” the IMF said in the report.
Despite El Salvador’s progress in security improvements and tourism growth, the country continues to face substantial macroeconomic challenges, including high fiscal deficits and significant debt. The IMF agreement could potentially unlock up to $3.5 billion in additional funding from various multilateral organizations, including the World Bank and Inter-American Development Bank.
Comprehensive Crypto Restrictions
By March’s end, El Salvador must identify all Bitcoin holdings across government entities, including the public company Chivo, the Bitcoin Management Agency, the Bitcoin Office, and the Lempa River Hydroelectric Power Plant executive board. This inventory will face a second review at the end of June.
The country also must liquidate its Bitcoin trust fund “Fidebitcoin,” previously used for Bitcoin acquisitions. Additionally, Chivo’s financial statements must be audited by an independent cryptocurrency-experienced auditor before July 2025 as part of the IMF’s second review process.
Perhaps most significantly, the IMF has explicitly prohibited the issuance of the much-anticipated Bitcoin Bonds. These bonds were intended to finance Bitcoin mining infrastructure and the development of Bitcoin City. Under the quantitative performance criteria, El Salvador cannot issue or guarantee “any type of debt or tokenized instrument that is indexed to or denominated in Bitcoin and implies a liability for the public sector.”
The amendments to the Bitcoin Law and the termination of El Salvador’s Bitcoin accumulation represent a fundamental transformation of the country’s cryptocurrency narrative. While the country made history as the first nation to adopt Bitcoin as legal tender, these IMF-mandated changes signal a substantial retreat from that pioneering position as economic priorities shift under international financial pressure.
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