Continued Discussions Between IMF and El Salvador Over Bitcoin Initiatives and Chivo Wallet Sale

The International Monetary Fund (IMF) announced on Tuesday that talks regarding El Salvador's Bitcoin initiatives are ongoing, focusing on improving transparency, protecting public resources, and reducing risks.

Key Takeaways

The IMF continues discussions with El Salvador regarding its Bitcoin initiatives, focusing on transparency and risk mitigation.
The Chivo crypto wallet, embroiled in controversy, may be sold or phased out.
El Salvador recently added 1,098 BTC to its reserves, bringing the total to 7,509 BTC amidst ongoing economic developments.
President Nayib Bukele emphasizes the country’s commitment to Bitcoin despite IMF warnings against further accumulation.

IMF El Salvador Bitcoin

The IMF is also in advanced negotiations concerning the sale of the government-managed Chivo crypto wallet. This wallet, the first of its kind initiated by a government for Bitcoin transactions, has faced numerous allegations of identity theft, fraud, and technical issues, leading to user accounts being frozen.

Previously, one of the creators of the Chivo wallet suggested that the government should consider shutting down the application due to the controversies it has sparked since its introduction.

In 2024, El Salvador secured a $1.4 billion loan from the IMF, which came after the country’s adoption of Bitcoin strained its relationship with the international body.

At that time, Stacy Herbert, head of El Salvador’s National Bitcoin Office, indicated that the Chivo wallet might either be sold or phased out. However, she reassured that several private Bitcoin wallets would continue to operate in El Salvador.

Ongoing IMF Discussions with El Salvador Regarding Bitcoin

In its latest update, the IMF highlighted that future discussions about Bitcoin with El Salvador will concentrate on maintaining transparency and addressing risk factors.

Additionally, the IMF acknowledged El Salvador's economic progress, stating that the country's growth is “surpassing expectations.”

“Real GDP growth is expected to be around 4% this year, with positive prospects for the upcoming year,” the IMF reported.

This recent update is part of the second review of El Salvador’s 40-month Extended Fund Facility (EFF).

Is El Salvador Still Accumulating BTC?

In the previous month, El Salvador added 1,098 BTC to its national Bitcoin treasury, an investment valued at nearly $100 million, reaffirming its policy of accumulating Bitcoin despite a recent market downturn.

Data from the Salvadoran Bitcoin Office shows that the country continues to build its crypto reserves, with the latest purchase recorded on December 22. The total now stands at 7,509 BTC.

El Salvador has upheld a consistent purchasing policy, acquiring one Bitcoin daily, even during times of significant market fluctuations.

In May, the IMF stated that it would “continue efforts” to prevent El Salvador from accumulating more BTC. Nonetheless, the country continues to increase its holdings, seemingly at odds with the terms agreed upon with the IMF.

“No, it’s not stopping,” said President Nayib Bukele via a post on X on March 4. “If it didn’t stop when the world rejected us and most ‘Bitcoiners’ abandoned us, it won’t stop now, and it certainly won’t stop in the future.”