El Salvador’s Bitcoin Growth Halted by IMF Loan Terms

Crypto News Regulation

Written by Aaron S.,

Editor-In-Chief

Last Updated: March 04, 2025

Key Takeaways

El Salvador's IMF deal bans the government from increasing Bitcoin holdings or issuing BTC-linked debt;
Bitcoin is no longer legal tender in El Salvador, but its use remains optional, and taxes must be paid in USD;
Despite restrictions, President Bukele continues to expand the country’s Bitcoin reserves, now at 6,100 BTC.

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El Salvador’s Bitcoin Growth Halted by IMF Loan Terms

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El Salvador is working on a $1.4 billion funding agreement with the International Monetary Fund (IMF), but it comes with strict conditions.

As part of the deal, the government is not allowed to increase its Bitcoin BTC $89,131.72 holdings. The IMF’s concerns over Bitcoin’s risks have led to rules preventing public institutions from voluntarily buying more of the cryptocurrency.

Documents released on March 3 confirm that the agreement also blocks the government from issuing Bitcoin-linked debt or financial instruments. The goal is to limit exposure to the price swings of digital assets and focus on financial stability.

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In a statement from February 26, the IMF’s executive director for El Salvador, Méndez Bertolo, explained that the loan program aims to improve governance, transparency, and economic resilience. He noted that Bitcoin-related risks are being managed and outlined recent changes to the country’s Bitcoin Law.

According to Bertolo, Bitcoin will no longer be considered legal tender. Its use will remain optional, and tax payments must be made in US dollars.

While the government must follow the IMF’s restrictions, President Nayib Bukele remains committed to Bitcoin as part of El Salvador’s financial strategy. On March 3, he announced another purchase, increasing the country’s total Bitcoin holdings to 6,100 BTC.

Meanwhile, Hong Kong's Securities and Futures Commission (SFC) recently introduced a new strategy called ASPIRe to boost crypto market access and regulation. Which areas are the focus of the plan? Read the full story.