El Salvador Increases Bitcoin Reserve After $1,4 Billion Deal with IMF

• El Salvador expands Bitcoin reserves after IMF deal.
• Country limits state activities with cryptocurrencies in new pact.
• Private initiatives and education strengthen local Bitcoin economy.

El Salvador recently added $1 million worth of Bitcoin to its strategic cryptocurrency reserve, shortly after finalizing a $1,4 billion financing deal with the International Monetary Fund (IMF). The acquisition of 11 Bitcoins brings the country’s total holdings to approximately 5.980 BTC, valued at around $580 million.

🇸🇻We just transferred over a million dollars worth of Bitcoin to our Strategic Bitcoin Reserve. pic.twitter.com/4ZrxGw9Od0

— The Bitcoin Office (@bitcoinofficesv) December 20, 2024

This purchase marks a change from the previous strategy of acquiring “one Bitcoin a day,” announced by President Nayib Bukele in 2022. According to Stacy Herbert, director of the National Bitcoin Office, there are plans to further intensify purchases of the cryptocurrency, even with the limitations imposed by the new agreement with the IMF.

To secure funding, El Salvador has agreed to restrict government transactions in Bitcoin, make its acceptance optional in the private sector, and limit tax payments to US dollars. In addition, the government plans to reduce its participation in the operation of the Chivo digital wallet, launched in 2021 as a state-owned solution to facilitate Bitcoin transactions.

The deal is still awaiting approval from the IMF’s Executive Board, but marks the end of protracted negotiations between the international body and the country over Bukele’s pro-Bitcoin policies. The IMF had previously warned of the potential economic risks of adopting the cryptocurrency as legal tender, which has put El Salvador’s financial stability under scrutiny.

Despite the restrictions, the Salvadoran government has reaffirmed its commitment to Bitcoin as legal tender, promoting initiatives that include Bitcoin-based capital markets, educational programs, and support for private wallets to strengthen the ecosystem. Herbert stated that the Chivo wallet will be sold or shut down, but stressed that private wallets will continue to serve the country.

At the time of publication, the price of Bitcoin was quoted at US$96.639,23 with a drop of 0.4% in the last 24 hours.

El Salvador’s adoption of Bitcoin as its official currency, which began in 2021, has put the country at the center of global discussions about the integration of cryptocurrencies into national economies. With the recent IMF agreement, El Salvador is adjusting its approach, but remains focused on building an economic future anchored in digital assets.