El Salvador’s Bitcoin Adventure: An Unveiling Report
In a groundbreaking revelation, a recent report has cast a new light on El Salvador’s audacious Bitcoin experiment. For an entire year, President Nayib Bukele, along with the National Bitcoin Office, pledged daily Bitcoin purchases, showcasing holdings exceeding 6,102 BTC. However, an International Monetary Fund (IMF) report from their July 15 Article IV consultation indicates that no new acquisitions have occurred since the $1.4 billion Extended Fund Facility was sanctioned in December 2024.
Unveiling the Illusion of Bitcoin Acquisitions
The IMF’s findings reveal that the apparent surge in government Bitcoin holdings was not the result of fresh investments. Instead, these increases stemmed from internal wallet transactions. These transfers artificially inflated balances displayed on public platforms, though they represented merely internal movements without utilizing taxpayer funds or impacting the market. Minor fluctuations in the Chivo e-wallet were attributed to internal adjustments rather than new deposits.
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Interestingly, the IMF did indeed compel El Salvador to halt Bitcoin purchases to secure a fiat loan. Footnote 9 of the report clarifies that the government has been consolidating funds across various official wallets, creating an impression of continued acquisition.
Reversing Bitcoin’s Legal Tender Status
Back in 2021, El Salvador made headlines by adopting Bitcoin as legal tender, a move that sparked both enthusiasm and caution globally. However, reports indicate that the nation reversed this decision in January 2025 under pressure from international financial institutions. Bitcoin was stripped of its legal-tender status, and commitments were made to cease using public funds for further Bitcoin acquisitions. The IMF has confirmed that these commitments have been upheld.
Currently, Bitcoin is trading at $118,328, according to TradingView.
Impending Deadline for Exiting Chivo E-Wallet
According to sources, El Salvador is on the verge of ending public-sector involvement in the Chivo system by July 31, 2025. Furthermore, the government has pledged to dismantle Fidebitcoin, the public Bitcoin trust it established. These steps aim to enhance fiscal transparency and ensure the continuity of the Extended Fund Facility.
Trust and Transparency Under Scrutiny
Analysts suggest that the primary concern revolves around trust. The practice of transferring coins among wallets while asserting new purchases might undermine the government’s credibility. This could lead citizens and investors to question other narratives being presented.
While no fresh financial resources were expended, the discrepancy between claims and reality places a spotlight on data transparency. The IMF acknowledged the government’s success in meeting program targets, but the coming weeks will determine if all commitments are honored.
Clearing out the Chivo e-wallet and dissolving Fidebitcoin are significant undertakings. If El Salvador adheres to the plan, it could reshape its narrative. However, failure to comply may provide skeptics with new reasons to cast doubt on future Bitcoin-related announcements.
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