El Salvador Plans to Continue Bitcoin Purchases Despite IMF Concerns
2024-12-20
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El Salvador announced Thursday that it would keep buying Bitcoin, possibly at a faster rate. This decision came just a day after finalizing a financing deal with the IMF, which had urged the country to reduce its crypto exposure.
The loan agreement states that the government is reducing Bitcoin-related risks and keeping private sector adoption voluntary. It also showed that the government’s Bitcoin risks will significantly decrease, aligning with IMF policies.
However, on Thursday, Stacy Herbert, director of El Salvador’s National Bitcoin Office, announced on X that the country would keep buying Bitcoin for its strategic reserve. She added that the office would continue shaping Bitcoin policies, creating roadmaps, attracting investors and launching educational programs.
🇸🇻EL SALVADOR SECURES $3.5 FUNDING DEAL➡️Bitcoin remains legal tender➡️El Salvador will continue buying bitcoin (at possibly an accelerated pace) for its Strategic Bitcoin Reserve➡️Bitcoin capital markets will continue to be built; for example, the recent tokenized issuance…— Stacy Herbert 🇸🇻🚀 (@stacyherbert) El Salvador to Maintain Daily Bitcoin Purchases
Further, Herbert confirmed that the government is still buying one Bitcoin daily, following its ongoing program of daily purchases.
President Nayib Bukele has previously said the government will continue this practice until Bitcoin “becomes unaffordable with fiat currencies.” El Salvador currently holds 5,969 Bitcoin worth $579m.El Salvador Plans Chivo Wallet Phase-Out Amid $1.4B IMF Agreement
On Wednesday, the country finalized a $1.4b loan agreement with the IMF, requiring President Bukele’s administration to scale back its Bitcoin policies. The deal specifies that tax payments will only be made in the US dollar, the country’s other official currency.
The agreement, still awaiting approval from the IMF Executive Board, marks a significant shift in El Salvador’s ambitious Bitcoin strategy.
The government also plans to reduce its role in the Chivo wallet, introduced as the official digital wallet for Bitcoin transactions. The wallet has seen limited adoption, with one survey showing that have not used Bitcoin despite its legal tender status.
Herbert announced plans to either sell or phase out the Chivo wallet. However, she confirmed that private sector Bitcoin wallets will continue to operate in El Salvador.