IMF to 'ensure' that El Salvador does not buy any more bitcoin

The International Monetary Fund announced Tuesday that it will work to "ensure" that the amount of bitcoin held by El Salvador's government does not change — a stance that runs counter to President Nayib Bukele's continued advocacy for increasing the nation's bitcoin holdings.

The latest statement from the IMF comes from its announcement that the first review of the Extended Fund Facility deal with El Salvador has reached a staff-level agreement from both parties.

Last December, El Salvador and the IMF reached their first agreement for the country to limit bitcoin-related activities in exchange for a 40-month financing package, which entails a $1.4 billion loan. Other institutions, including the World Bank, may also provide additional financial support, bringing the total package to roughly $3.5 billion.

The country quickly moved to advance the deal, with its Congress approving amendments to incorporate the IMF agreements into its Bitcoin Law, including making the acceptance of bitcoin payments voluntary for the private sector. 

The IMF Executive Board also greenlit the financing deal in February, under which El Salvador would receive its disbursement of $120 million upon separate approval by the board.

The fund program aims to address El Salvador's macroeconomic and structural challenges. The IMF views that the country's bitcoin reserves pose potential risks that "have not yet materialized," and stated in its February statement that it would confine government engagement in bitcoin-related activities and purchases. 

Meanwhile, Bukele, a prominent proponent of bitcoin, pledged to further grow El Salvador's bitcoin stash even after the IMF deal was approved. 

"No, it's not stopping," Bukele wrote in an X post in March. "If it didn't stop when the world ostracized us and most 'bitcoiners' abandoned us, it won't stop now, and it won't stop in the future." 

Just last week, Bukele posted on the social media platform that the country's bitcoin holdings saw over $357 million in unrealized profit.

However, Bukele reposted the IMF's announcement on Tuesday without addressing the section of the article that stated the IMF's plan to restrict further purchases of bitcoin, leaving uncertainty over the future of the nation's bitcoin accumulation strategy.

The Block has reached out to the IMF and Bukele for further comment on the matter.