El Salvador, which made history in 2021 by recognizing Bitcoin as legal tender, has maintained its Bitcoin policy, which has sparked public debate ever since.
However, the country signed a loan agreement with the International Monetary Fund (IMF) in 2025. Under this agreement, the IMF provided a $1.4 billion loan, with conditions requiring El Salvador’s public sector to mitigate risks stemming from Bitcoin activities and limit Bitcoin accumulation.
Under the agreement, El Salvador has received its first payment from the IMF, while the IMF has completed its second and third assessments under the $1.4 billion loan program.
IMF Provides $138 Million in Funding to El Salvador: Bitcoin Condition Exemption!
According to Reuters, the IMF has determined that El Salvador has failed to meet certain performance criteria under the program. These included criteria related to the country’s Bitcoin holdings.
Nevertheless, the IMF, taking into account the corrective measures taken and renewed commitments made by the El Salvadoran government, granted an exception to the relevant criteria and approved the disbursement of $138 million in funds.
IMF officials stated that documents provided by El Salvador showed that the Bitcoins accumulated since the initial review reflected private donations rather than the use of public funds.
The IMF also noted that El Salvador has made progress on anti-money laundering controls, fiscal transparency, and the transfer of a majority stake and control of the state-backed Chivo e-wallet to a private operator.
The IMF stated that although El Salvador did not meet some performance criteria regarding its Bitcoin accumulation, it granted the country an exception to those criteria in recognition of the progress it had made.
“…Significant progress has been made in financial sector reforms, fiscal transparency, anti-money laundering and anti-terrorist financing reforms, and the transfer of majority ownership and control of the state e-wallet Chivo to a private operator. However, some performance criteria, including Bitcoin accumulation, were not met; exemptions were granted based on strong corrective measures and renewed commitments.”
In response, the IMF stressed that the government should also gradually eliminate other related risks.
*This is not investment advice.
