The International Monetary Fund said negotiations to sell the Salvadoran government's Chivo wallet were "progressing well," while President Bukele affirmed his continued purchase of Bitcoin despite the $1.4 billion loan agreement.
The International Monetary Fund has confirmed that the Salvadoran government is in negotiations to sell its state-operated Chivo Bitcoin wallet, a move considered a key condition in a $1.4 billion loan agreement to be signed in 2024. However, this commitment is at odds with the latest statements from President Nayib Bukele regarding the continuation of a Bitcoin accumulation strategy.
In a statement on Monday, the head of the IMF mission for El Salvador said that negotiations on the sale of the Chivo digital wallet “are progressing well,” while affirming that the government remains in separate discussions regarding the purchase of Bitcoin. This statement follows an agreement in May under which the IMF disbursed $120 million as the first installment of a total loan of $1.4 billion, on the condition that the Salvadoran government cease further BTC purchases.
According to publicly available terms, the agreement requires the government to limit the level of public sector involvement in economic activities related to Bitcoin, make private sector adoption of BTC voluntary, and narrow Vai in interfering with Chivo wallets. However, compliance with these commitments remains a major question mark.
Despite the IMF reporting in July that El Salvador had not purchased any additional BTC since December 2024, the country's Bitcoin Office continues to announce purchases of the cryptocurrency. Most notably, in November, the government purchased 1,090 Bitcoin worth approximately $100 million. According to official data, the Salvadoran government currently holds 7,509 Bitcoin, equivalent to approximately $659 million.
Bukele insists he will not abandon his Bitcoin strategy.
Despite the agreement with the IMF, President Bukele announced in March that the government would continue its Bitcoin investment strategy, planning to buy at least 1 BTC per day. His “no stopping” statement raises serious questions about the government’s ability to comply with the terms of the IMF loan and the potential impact on the financial relationship between El Salvador and the organization.
El Salvador became the first country in the world to recognize Bitcoin as legal tender in 2021, a bold decision driven primarily by President Bukele. Since then, the government has steadily accumulated this cryptocurrency despite opposition from international financial institutions and concerns about fiscal risks.
An IMF spokesperson said they could not comment on the details of the Chivo sale because negotiations were still ongoing. However, the sale of the Chivo wallet is seen as an important step toward reducing the Vai of the state in the Bitcoin ecosystem and meeting the IMF's requirement to limit public finance risks.
The conflict between commitments to the IMF and President Bukele's statements is creating uncertainty about the future direction of El Salvador's cryptocurrency policy. While the IMF wants to reduce the state's Vai in Bitcoin to ensure fiscal stability, Bukele seems steadfast in his vision of making El Salvador a global Bitcoin hub, despite pressure from the international financial community.
