IMF Tightens Bitcoin Restrictions on El Salvador as President Bukele Defies New Conditions

The International Monetary Fund (IMF) has introduced additional conditions to El Salvador’s 40-month, $1.4 billion Extended Fund Facility (EFF). When the agreement was initially approved in December, it already placed strict restrictions on the government’s Bitcoin activities, though it allowed the country to retain its existing holdings.

“Going forward, program commitments will confine government engagement in Bitcoin-related economic activities, as well as government transactions in and purchases of Bitcoin,” stated Nigel Clarke, the IMF’s deputy managing director and acting board chair.

According to a March 2025 IMF Country Report published on Monday, the agreement now includes three key crypto-related requirements.

First, a "continuous quantitative performance criteria" mandates that public sector entities cannot acquire additional Bitcoin, maintaining a strict “ceiling of 0” throughout the program period.

Additionally, the Fidebitcoin trust fund must be liquidated by July 2025, and the government must end its involvement in the Chivo wallet system.

The third requirement demands that all government Bitcoin wallet addresses be publicly disclosed, Chivo user funds be segregated, and financial statements for crypto-related entities undergo audits.

Revisions to El Salvador’s Bitcoin Law, originally enacted in June 2021, are also in progress to clarify Bitcoin’s legal status. The IMF notes that this will involve "eliminating the obligation for the public and private sector to accept Bitcoin in transactions," making its acceptance voluntary for businesses while restricting its use in the public sector.

A Shifting Approach

In December, El Salvador had already started scaling back its Bitcoin integration. By January, the country had agreed to some of the IMF’s conditions.

Now, it appears that previous IMF documents hinted at restrictions on El Salvador’s Bitcoin purchases, as noted by Samson Mow, CEO of Bitcoin firm JAN3. "I would have preferred to hear it from the Bukele administration than from the IMF," Mow commented on X.

The IMF report also explicitly bans the issuance of “any type of debt or tokenized instrument that is indexed to or denominated in Bitcoin.” These rules are classified under "continuous quantitative performance criteria," meaning they are obligatory rather than optional.

Despite these restrictions, El Salvador still holds around 6,100 BTC, valued at approximately $510 million, following its recent purchase of 5 BTC from Bitfinex, according to Arkham Intelligence data.

Meanwhile, the country continues to position itself as a crypto and AI-friendly hub. On March 2, President Nayib Bukele met with Andreessen Horowitz (a16z) co-founders Marc Andreessen and Ben Horowitz to discuss AI investment opportunities and El Salvador’s potential as a regional tech center.

Two weeks earlier, Bukele met with MicroStrategy chairman Michael Saylor to discuss Bitcoin. In January, stablecoin issuer Tether also established operations in El Salvador.

Bukele’s Defiance

Amid these developments, President Nayib Bukele has publicly refuted the terms laid out by the IMF to secure the $1.4 billion loan agreement. Just days after the IMF announced the new requirements, Bukele posted on X, stating, "'This all stops in April.' This all stops in June.' This all stops in December.' No, it's not stopping."

The new rules outlined in the IMF's March 2025 report aim to enforce a "continuous quantitative performance criteria" with a "ceiling of 0" on government Bitcoin purchases, among other restrictions. These terms compel El Salvador to halt Bitcoin purchases to receive funding in tranches over an extended period or risk jeopardizing the country’s Extended Fund Facility program.

In defiance of these stipulations, Bukele’s Bitcoin Office added 1 BTC to the country’s national reserves on Tuesday, bringing El Salvador’s total holdings to 6,101 BTC ($510 million), according to Arkham Intelligence data.

While critics continue to question Bukele's leadership, the president finds support among Bitcoin advocates, including MicroStrategy’s Michael Saylor, who posted on X in response to Bukele’s tweet, "Bitcoin adoption is unstoppable."