El Salvador defies IMF over Bitcoin purchases

El Salvador continues to defy the International Monetary Fund (IMF) by maintaining its Bitcoin (CRYPTO:BTC) purchases, despite the IMF's conditions for a $1.4 billion loan agreement.

The country's opposition party, ARENA, has criticised President Nayib Bukele's stance, warning that continued defiance could destabilise El Salvador's economy and jeopardise the IMF deal.

ARENA's concerns stem from the potential economic risks associated with Bitcoin investments.

The party emphasises the need for a responsible fiscal policy, especially given El Salvador's delicate economic state.

However, due to recent election losses, ARENA lacks the political influence to alter Bukele's policy directly.

El Salvador has been one of the world's largest Bitcoin holders since adopting it as legal tender in 2021.

This move has created new economic opportunities but also drawn criticism from the IMF, which has long opposed the country's Bitcoin strategy.

The IMF's stance softened in late 2024, offering El Salvador substantial loans if it reduced its support for Bitcoin.

The agreement required El Salvador to stop using public funds for Bitcoin purchases and to amend its Bitcoin Law, which it did in January 2025.

Despite these changes, El Salvador has continued to buy Bitcoin daily, with President Bukele insisting that purchases will not cease.

This defiance could lead to a confrontation with the IMF, potentially threatening the country's economic stability.

"If it didn’t stop when the world ostracised us and most 'bitcoiners' abandoned us, it won’t stop now, and it won’t stop in the future. Proof of work > proof of whining," Bukele stated.

The IMF has explicitly prohibited the public sector from accumulating Bitcoin voluntarily and restricted the issuance of Bitcoin-indexed debt instruments.

However, El Salvador's Bitcoin Office has continued to acquire more BTC, with the country now holding over 6,100 Bitcoin, valued at approximately $504 million.

The ongoing tension between El Salvador and the IMF highlights the challenges of balancing economic stability with innovative financial strategies.

While El Salvador sees Bitcoin as a path to economic independence, the IMF views it as a risk that needs to be mitigated.

The outcome of this standoff remains uncertain, with potential implications for both El Salvador's economy and the broader adoption of cryptocurrencies.

At the time of reporting, the Bitcoin (BTC) price was $81,830.67.