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El Salvador got the money. The IMF released $138 million to the country after granting waivers for missed performance targets tied to Bitcoin — all under a broader $1.4 billion financing program that’s been running for 40 months.
Why It Matters
The release of $138 million by the IMF to El Salvador, despite missed Bitcoin benchmarks, underscores the ongoing complexities of the country's financial strategies and its reliance on cryptocurrency. This development highlights the IMF's willingness to provide support even as El Salvador navigates the challenges of integrating Bitcoin into its economy, which may influence investor sentiment and perceptions of risk in the region. Additionally, it raises questions about the effectiveness of Bitcoin as a fiscal tool and the implications for other nations considering similar paths.
The IMF’s Executive Board wrapped up its second and third reviews of El Salvador’s Extended Fund Facility arrangement, known as the EFF, and signed off on releasing the funds. Missing benchmarks didn’t kill the deal. The Board handed out waivers because El Salvador came back with corrective measures and fresh commitments strong enough to satisfy the organization’s concerns. The country had made real progress on financial sector reforms and fiscal transparency — two areas the IMF watches closely when deciding whether to keep disbursing cash under a program like this one.
No Public Money Went Into Bitcoin
Here’s the part that probably matters most to anyone watching El Salvador’s Bitcoin experiment from the outside. The country did not use public funds to buy more Bitcoin after the IMF’s first program review. Any growth in its Bitcoin holdings came from private donations. The IMF confirmed that directly, and said the verification came from documents provided by Salvadoran authorities themselves.
That distinction — private donations versus government purchases — is what kept El Salvador technically inside the program’s terms. It’s a fine line, but it held.
And the Chivo wallet situation has shifted too. Chivo is the government-backed Bitcoin wallet El Salvador launched when it made Bitcoin legal tender back in 2021. The majority ownership and operational control of Chivo have now been handed over to a private operator. The government kept a minority stake and retains some custodial duties, but it’s basically out of the driver’s seat. The move is pretty much designed to shrink the state’s footprint in Bitcoin transactions and push management toward private hands.
What the IMF Wants Going Forward
The fund isn’t done watching. Per the IMF’s own framing, the ongoing priorities include minimizing state involvement in Bitcoin activities, tightening crypto-asset regulation, and making public-sector crypto holdings more transparent. There’s no plan on the table for El Salvador to accumulate more Bitcoin beyond what’s already been documented through those private donations.
AML/CFT reform is also on the list. The IMF wants to see stronger anti-money laundering and counter-financing of terrorism rules as part of the broader governance push. That’s not unique to El Salvador — regulators globally have been pushing crypto-adjacent governments to clean up their compliance frameworks, and the IMF is applying the same pressure here.
It’s worth stepping back for a second. El Salvador became the first country in the world to adopt Bitcoin as legal tender, a move that drew enormous attention and real skepticism from international financial institutions. The IMF was openly critical at the time, warning about financial stability risks and the complications of using a volatile asset as a national currency. The $1.4 billion program that followed came with strings attached — performance benchmarks that clearly weren’t all met, which is how we ended up with waivers in the first place.
The Chivo wallet transfer is probably the most concrete structural change to come out of all this. It’s one thing to promise reduced government involvement in Bitcoin; it’s another to actually hand operational control of the country’s main Bitcoin infrastructure to a private entity. The government’s minority stake and custodial role mean it’s not completely out of the picture, but the direction of travel is clear.
Whether El Salvador keeps building its Bitcoin reserves through donations or eventually stops entirely isn’t spelled out. The IMF’s position is that no further accumulation is planned beyond current documented donations — but “planned” is doing a lot of work in that sentence. Unclear what happens if large private donations continue flowing in, or how the IMF would treat that down the road.
The broader crypto regulatory picture in El Salvador is still murky. The country has been working on tightening its frameworks, and the IMF says it supports those efforts. But the details of how crypto-asset regulation will actually evolve, and how transparent the public-sector holdings will become, are still works in progress.
What’s concrete right now: $138 million released, waivers granted, Chivo handed to private operators, and Bitcoin accumulation confirmed as donation-funded rather than government-funded. El Salvador’s government retains a minority stake in Chivo and some custodial responsibilities for the wallet’s operations.
Frequently Asked Questions
How much did El Salvador receive from the IMF and under what program?
El Salvador received $138 million from the IMF under a $1.4 billion Extended Fund Facility arrangement, a 40-month program, after the Executive Board completed its second and third reviews.
Why did the IMF grant waivers despite missed Bitcoin benchmarks?
The IMF granted waivers because El Salvador took corrective measures and made renewed commitments, including progress on financial sector reforms and fiscal transparency.
What happened to the Chivo Bitcoin wallet?
Majority ownership and operational control of the Chivo wallet were transferred to a private operator, with the Salvadoran government retaining a minority stake and some custodial duties.
