El Salvador reaches a new agreement with the IMF: retains its Bitcoin holdings in fiscal reform.

In order to obtain a 40-month extended loan from the International Monetary Fund (IMF), El Salvador has reached an agreement with the IMF.

According to the protocol, while retaining the existing Bitcoin holdings, El Salvador is required to freeze Bitcoin reserves worth $675 million during the fiscal reform period and plans to gradually phase out the state-owned Chivo wallet before July.

However, the protocol is still pending approval from the IMF Executive Board, provided that El Salvador first complies with the conditions of the agreement.

IMF officials pointed out that the country has made significant progress in implementing its economic reform plan, successfully achieving several fiscal and reserve targets. At the same time, increased investor confidence and growing remittance inflows are driving the continued expansion of the Salvadoran economy. This series of actions has strengthened the country's governance and financial resilience reforms.

To address economic challenges, El Salvador will implement austerity measures, including reducing public wages, limiting regular expenditures, and planning reforms to the civil service and pension systems. At the same time, the upcoming "Fiscal Sustainability Law" will support these measures and increase central bank deposits to enhance foreign exchange reserves.

Despite progress, the IMF reiterated its concerns about El Salvador's Bitcoin strategy. The organization stated that it is working to ensure that the El Salvador government does not increase its holdings of Bitcoin. Additionally, the IMF is taking measures to require El Salvador to gradually stop public sector participation in the Chivo wallet by the end of July.

As early as December 2024, El Salvador reached a $1.4 billion loan protocol with the IMF, which includes terms that restrict El Salvador's cryptocurrency activities, requiring the private sector to voluntarily accept BTC and limiting public sector participation in related transactions.

To comply with the protocol, the Salvadoran Congress passed an amendment to the "Bitcoin Law" to align with IMF regulations. In February 2025, the IMF Executive Board approved the financing agreement, allowing an initial allocation of $120 million, with subsequent approvals required.

Despite facing protocol restrictions from the IMF, El Salvador continues to adhere to its strategy of purchasing one Bitcoin (BTC) daily. As of May 28, 2025, the country holds approximately 6,191 BTC, valued at around $672 million. Its president has also publicly stated that the country will not stop buying Bitcoin as a strategic reserve.

#El Salvador