By Bilyonaryo staff
Reuters – El Salvador is getting another $138 million from the International Monetary Fund, but the country that once made Bitcoin legal tender is expected to keep its crypto wallet closed.
The IMF approved the immediate release of about $138 million after completing the second and third reviews of El Salvador’s lending program, citing stronger-than-expected economic performance and progress on fiscal reforms.
The Fund said improved security and stronger investor confidence under President Nayib Bukele have helped the economy outperform expectations.
Bitcoin, however, remains a sticking point.
The IMF granted El Salvador waivers after the government missed program targets covering the accumulation of the cryptocurrency.
But the Fund said it does not expect the government to keep buying.
“No further Bitcoin accumulation is envisaged beyond the documented donations,” the IMF said, while calling for greater transparency over crypto assets held across the public sector.
El Salvador became the first country in the world to make Bitcoin legal tender in 2021, turning the small Central American nation into one of the cryptocurrency’s most prominent government backers.
Under its IMF program, however, the government has been reducing the state’s role in crypto and limiting the exposure of public finances to Bitcoin.
That includes transferring majority control of Chivo, the government-backed crypto wallet, to a private operator. Authorities are also working on tighter regulation of digital assets, including possible changes to the country’s Digital Asset Issuance Law.
Questions over El Salvador’s Bitcoin holdings resurfaced after Bukele and the government’s Bitcoin Office continued to suggest that the country was adding to its reserves.
The IMF said in July that the total amount of Bitcoin held across government-controlled wallets had actually remained unchanged, consistent with commitments made under the lending program.
A key objective of the agreement is to ring-fence the government’s Bitcoin holdings so public funds and resources provided by international lenders are not used to speculate on the cryptocurrency.
With another $138 million released, the IMF said the program will now focus on strengthening El Salvador’s finances, foreign-exchange buffers, financial system and governance.
Pension and civil service reforms, which have fallen behind schedule, remain on the government’s to-do list.
