El Salvador’s Bitcoin Strategy: IMF Clarifications and Implications
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IMF Sets the Record Straight on El Salvador’s Bitcoin Holdings
The International Monetary Fund (IMF) has decisively addressed recent speculations surrounding El Salvador’s Bitcoin strategy. The organization clarified that the Central American nation has not increased its Bitcoin reserves, despite what some may have inferred. According to the IMF, any perceived growth in the Strategic Bitcoin Reserve Fund (SBRF) is merely due to internal “movements across various government-owned wallets,” leaving the country’s total Bitcoin holdings unchanged.
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Are Bitcoin Wallets in El Salvador Being Rearranged?
Julie Kozack, the Communications Director at the IMF, provided these insights during a regular press briefing. In response to a query from Inner City Press reporter Matthew Lee, Kozack confirmed that El Salvador’s Bitcoin holdings across government wallets remain stable, aligning with the country’s program commitments. She further explained that any apparent growth in the SBRF is attributable to transfers among different state-controlled wallets.
IMF’s Review and Financial Implications
This clarification follows the IMF Executive Board’s recent completion of El Salvador’s 2025 Article IV consultation and the first review of its 40-month Extended Fund Facility (EFF). This review enabled the release of a $118 million tranche, escalating the total disbursements under the $1.4 billion arrangement to approximately $231 million. The EFF mandates the Bukele administration to maintain a consistent net Bitcoin exposure while ensuring public finances adhere to what the IMF describes as “a firm downward debt path.”
Contradictory Reports from El Salvador’s Bitcoin Office
Just hours before the IMF’s statement, El Salvador’s Bitcoin Office announced on social media platform X: “EL SALVADOR JUST BOUGHT MORE BITCOIN,” displaying an 8 BTC purchase on a screenshot, bringing their total to 6,248.18 BTC – valued at around $722 million at the current market price of approximately $116,000. This announcement aligns with President Nayib Bukele’s recurring motto that the country acquires “one Bitcoin a day.” However, the IMF maintains that these figures are misleading and result from internal fund movements rather than actual net purchases.
Understanding the Technical Framework
According to the EFF’s technical memorandum of understanding, El Salvador is required to limit net cryptocurrency purchases by the non-financial public sector to the level established when the program was initiated. This stipulation aims to mitigate further volatility in a public balance sheet already exposed to Bitcoin, equivalent to about 2% of GDP. Earlier this year, Reuters highlighted the IMF’s cautionary stance against El Salvador increasing its government cryptocurrency exposure, even as officials celebrated periodic acquisitions.
Current Reactions and Market Position
As of now, neither President Bukele nor his Bitcoin advisor Max Keiser has publicly responded to the IMF’s clarifications. Meanwhile, the Bitcoin Office has not retracted or altered its initial statement. At the time of reporting, Bitcoin was trading at a fluctuating market price.
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