The International Monetary Fund ( IMF ) has praised the economic improvement in El Salvador, but at the same time has also criticized the country's ongoing Bitcoin experiments.
On Friday, IMF stated in a statement that it had approved the disbursement of $139 million to this Central American country, while also attempting to “reduce the country’s involvement in Bitcoin-related activities.”
In 2021, El Salvador designated Bitcoin as its legal tender, a move that caused dissatisfaction among IMF and other major institutions. At that time, the Latin American country was negotiating a development loan with IMF.
IMF stated in September that El Salvador had not purchased Bitcoin; however, the country's Bitcoin office has repeatedly claimed that they have indeed been buying this cryptocurrency.
IMF indicates that 'with the continuous improvement of security conditions and the support of investor confidence, economic activities have exceeded expectations, and at the same time, macroeconomic imbalances are also continuing to be resolved.'
IMF also stated: 'However, certain performance criteria were not met, including in terms of Bitcoin accumulation; given that effective corrective measures have been taken and new commitments have been made, the relevant exemptions have been approved.'
IMF further stated that the Salvadoran government's involvement in Bitcoin-related activities is being gradually withdrawn, and mentioned that 'except for donations that are documented, there is no longer any intention to accumulate more Bitcoin.'
In 2022, El Salvador's President Nayib Bukele stated that the country would purchase one Bitcoin per day, but the source of funds has never been clear, nor is it known whether he actually carried out such purchases.
IMF stated in September that El Salvador did not use public funds to accumulate Bitcoin for at least a period of time; instead, it received Bitcoin through private donations.
El Salvador reached a loan agreement worth $1.4 billion with IMF at the end of December last year, but IMF demanded that the country reduce certain aspects of its Bitcoin strategy.
In 2021, the Salvadoran government gave Bitcoin to its citizens and launched a wallet, hoping that more people in this dollarized country would use this cryptocurrency.
In 2024, President Bukele admitted that Salvadorans were not using this cryptocurrency for shopping as expected, yet he continued to claim that the government was still continuously hoarding Bitcoin.
