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    bnbBNB (BNB) $ 302.66 0.19%
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IMF and El Salvador on Bitcoin clashing

IMF and El Salvador on Bitcoin: Tensions Rise Over Crypto Holdings Strategy

https://icn.live/wp-content/uploads/2025/05/IMF-and-El-Salvador.mp3
  • by ICN.live
Salma Al-Tamimi

IMF and El Salvador on Bitcoin are clashing once again as their views on crypto diverge significantly.

President Nayib Bukele remains determined to expand the country’s bitcoin stash. The IMF, on the other hand, is working to freeze it. The tension stems from a $1.4 billion loan deal that includes limits on Bitcoin activities.

In 2023, El Salvador secured a 40-month Extended Fund Facility arrangement with the IMF. A key condition? Keep bitcoin exposure low. The IMF fears volatility, legal uncertainty, and fiscal risk from the nation’s crypto-heavy stance. In contrast, Bukele sees bitcoin as a long-term asset.

The loan package is substantial. It may total $3.5 billion if supported by other institutions like the World Bank. The IMF already approved $120 million in disbursements. In return, El Salvador promised to make bitcoin optional for businesses and to curb public bitcoin dealings.

IMF and El Salvador on Bitcoin: Who Controls the Digital Future?

Despite that, Bukele continues doubling down on bitcoin. Just this March, he declared on X, “No, it’s not stopping.” He also shared that the country made over $357 million in unrealized profits from its bitcoin holdings.

The IMF doesn’t share Bukele’s optimism. It believes the government’s bitcoin assets carry risk, even if those risks haven’t materialized. It reiterated this view during the first review of the deal, seeking to ensure El Salvador doesn’t grow its bitcoin reserves.

Interestingly, Bukele reposted the IMF announcement without commenting on its anti-bitcoin section. This silence raises questions. Will he back down on his strategy? Or will El Salvador find ways to bypass the deal’s crypto clauses?

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El Salvador’s Bitcoin Gamble vs. IMF’s Financial Guardrails

IMF and El Salvador on Bitcoin represent more than a national policy debate. It’s a battle between traditional finance and decentralized freedom.
El Salvador wants sovereignty in its monetary future. The IMF wants responsible macroeconomic management.

Observers are watching closely. Can Bukele stick to his bitcoin goals without breaching IMF terms? Will the IMF tighten the leash? One thing is certain — the outcome will shape future crypto deals between sovereign states and global institutions.

For now, El Salvador walks a financial tightrope. Bitcoin profits are real, but so is the IMF’s control.

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Why is the IMF trying to limit El Salvador’s bitcoin activity?

The IMF is concerned about the risks associated with bitcoin, including its volatility, potential legal uncertainty, and macroeconomic impact on El Salvador. In exchange for a $1.4 billion loan, the country agreed to limit its crypto-related activities. The IMF believes that government bitcoin holdings could pose a threat to fiscal stability. This restriction is part of a larger financial support package aimed at addressing El Salvador’s structural and economic challenges.

What does President Bukele think about the IMF restrictions?

President Nayib Bukele has made it clear that he will continue expanding the country’s bitcoin portfolio. He views bitcoin as a strategic asset for El Salvador’s economic future and doesn’t plan to halt accumulation. Despite the IMF’s opposition, Bukele remains committed to leveraging bitcoin’s long-term potential, emphasizing national sovereignty in financial decision-making.

How much has El Salvador profited from its bitcoin holdings?

According to Bukele’s recent post on social media, El Salvador’s bitcoin holdings have gained over $357 million in unrealized profit. These gains come amid bitcoin’s rising price in early 2025. However, unrealized profits are paper gains — they aren’t locked in unless the country sells. The IMF, meanwhile, remains skeptical of the sustainability and stability of such assets.

Could this disagreement affect the IMF loan deal?

Yes, it could. The IMF has already disbursed $120 million, but future disbursements may depend on El Salvador complying with the agreed terms. If Bukele continues to grow bitcoin reserves against IMF guidance, there could be friction, delays, or even suspension of the loan deal. This puts El Salvador in a tricky spot between crypto ambition and international financial cooperation.

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