El Salvador’s President Nayib Bukele defies IMF restrictions on Bitcoin, claiming the country will not cease its Bitcoin operations despite an agreement for a $1.4 billion loan that includes stringent conditions. These conditions require no government Bitcoin purchases and liquidation of the Fidebitcoin trust fund by July 2025. El Salvador’s total cryptocurrency holdings now stand at 6,101 BTC, valued at approximately $510 million. Bukele remains resolute in his Bitcoin strategy, while IMF compliance reviews could threaten the loan package.
President Nayib Bukele of El Salvador has openly defied the International Monetary Fund (IMF) by rejecting terms aimed at curbing the nation’s Bitcoin activities. This confrontation arises following the IMF’s announcement of new conditions connected to a $1.4 billion loan agreement established in December. Bukele vehemently stated, “This all stops in April. This all stops in June. This all stops in December. No, it’s not stopping,” on X (formerly Twitter) as a rebuttal to the IMF’s March 2025 country report.
The IMF has instituted stringent regulations aimed at curbing government Bitcoin purchases, imposing a blanket prohibition on any additional acquisitions with public funds. Furthermore, the IMF mandates the liquidation of El Salvador’s Fidebitcoin trust fund by July 2025, and the government must also cease its involvement with the Chivo wallet system. All government Bitcoin wallet addresses must be disclosed to enhance transparency regarding the nation’s cryptocurrency assets.
El Salvador confronts impending compliance assessments in June and September. Failure to meet these standards could jeopardize the continuation of the loan package. Nevertheless, Bukele remains resolute, announcing the addition of 1 Bitcoin to the national reserves on the same day as his public defiance, elevating the total holdings to 6,101 BTC, valued at approximately $510 million.
In 2021, El Salvador made history by becoming the first nation to designate Bitcoin as legal tender, a decision met with considerable scrutiny from global experts and institutions. The IMF has consistently criticized this strategy, warning of potential risks to financial stability and consumer protection. In prior discussions regarding the loan, the IMF recommended limiting the objectives of the country’s Bitcoin Law and enhancing regulatory frameworks to mitigate public sector exposure.
Moreover, according to the latest IMF report, El Salvador must halt the accumulation of Bitcoin through both purchases and mining activities. The country is required to provide a comprehensive account of all Bitcoin possessed by the administration, including those held in public wallets and ATMs associated with Chivo and related entities. Additionally, the report dismisses any previous plans for Bitcoin Bonds aimed at financing Bitcoin mining infrastructure and the establishment of Bitcoin City.
While challenges loom large, Bukele remains steadfast in his commitment to a pro-Bitcoin agenda, asserting, “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.” The current IMF agreement could potentially release $3.5 billion from a variety of institutions, including the World Bank and the Inter-American Development Bank.
In conclusion, President Nayib Bukele’s rejection of the IMF’s restrictive conditions signifies a bold stance on El Salvador’s Bitcoin strategy. Despite facing significant challenges and potential repercussions, Bukele’s administration continues to pursue an expansionist approach to cryptocurrency. The sustainability of this strategy remains uncertain, particularly regarding compliance with upcoming IMF reviews. Nonetheless, the commitment to Bitcoin as legal tender underscores the ongoing tension between sovereign economic strategies and international financial regulations.
Original Source: coincentral.com
