The International Monetary Fund (IMF) is looking to restrict Bitcoin purchases by El Salvador as part of an extended $1.4 billion funding arrangement with the country.
On March 3, the IMF issued a new request for an extended arrangement under its fund facility to El Salvador, filing several new documents, including a staff statement update and a statement by its executive director for El Salvador.
The technical memorandum of understanding indicated a condition of “no voluntary accumulation of BTC by the public sector in El Salvador.”
Additionally, the memorandum requested the restriction of public sector issuance of “any type of debt or tokenized instrument that is indexed to or denominated in Bitcoin and implies a liability to the public sector.”
An excerpt from the IMF’s technical memorandum of understanding with El Salvador. Source: IMF
IMF’s Méndez Bertolo: “Bitcoin-related risks are being mitigated”
In an accompanying statement from Feb. 26, Méndez Bertolo, the fund’s executive director for El Salvador, emphasized that the IMF’s extended fund facility for El Salvador aims to provide “improvements in governance, transparency, and resilience to boost confidence and the country’s growth potential.”
“Meanwhile, Bitcoin-related risks are being mitigated,” Bertolo stated, adding:
“The authorities enacted amendments to the Bitcoin Law that clarify the legal nature of Bitcoin and remove from the law the essential features of legal tender. Acceptance of Bitcoin will be voluntary, tax payments will be made in US dollars, and the role of the public sector in the Bitcoin project will be confined.”
Bertolo mentioned that the IMF program is expected to attract “substantial additional financial support” from the World Bank, the Inter-American Development Bank and other regional development banks.
IMF further limits public sector Bitcoin purchases
The IMF’s latest loan conditions reinforced prior commitments from the Salvadoran government to limit its engagement in Bitcoin-related economic activities.
The statement said that the deal aims to address the potential risks of El Salvador’s Bitcoin project in line with the “fund policies and with fund advice to the authorities.”
It added: “Going forward, program commitments will confine government engagement in Bitcoin-related economic activities, as well as government transactions in and purchases of Bitcoin.”
The IMF said that El Salvador will enhance regulation and supervision of digital assets “in line with evolving international best practices.”
This marks another step in the IMF’s ongoing efforts to curb El Salvador’s Bitcoin adoption. The country initially secured the $1.4 billion funding deal in December 2024 in exchange for scaling back its Bitcoin-related initiatives.
In mid-February, Samson Mow — Jan3 CEO and advocate for nation-state Bitcoin adoption — highlighted the IMF’s vague language on whether it would allow El Salvador to continue accumulating Bitcoin.
Source: The National Bitcoin Office (ONBTC) of El Salvador under President Nayib Bukele
Despite the IMF’s stance, Salvadoran President Nayib Bukele has continued acquiring Bitcoin. On March 3, Bukele announced a new purchase, bringing the country’s total holdings to 6,100 BTC.
Cointelegraph approached the IMF for comment regarding its latest El Salvador deal statement but did not receive a response by the time of publication.
Magazine: Crypto has 4 years to grow so big ‘no one can shut it down’: Kain Warwick, Infinex
