IMF bans El Salvador from buying bitcoins in exchange for granting a loan

Earlier this year, the country’s parliament had already stripped the first cryptocurrency of its legal tender status

04.03.2025 - 13:45

3 min

What’s new? The International Monetary Fund (IMF) plans to restrict bitcoin purchases by the government of El Salvador as part of a $1,4 billion loan agreement. On March 3, the IMF sent a memorandum with a number of conditions, including the public sector refraining from accumulating BTC, as well as issuing debt and tokenized instruments linked to the first cryptocurrency.

IMF press release

What else is known? In previous years, the IMF has repeatedly denied El Salvador a loan since BTC has had legal tender status in the country since 2021. According to the fund managers, this posed a threat to the financial stability of the state.

As a result, on January 30, 2025, El Salvador’s parliament approved a reform of the bitcoin law that stripped it of its status as official currency. Now sellers are not obliged to accept it as payment, although they can do so if they wish. As for the payment of taxes, it can once again only be made in US dollars.

The reform also limited public sector participation in the crypto market, which will likely make it impossible to issue government bitcoin bonds, which has been in preparation for several years.

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The IMF said in a statement that the new agreement is designed to reduce the risks of El Salvador’s bitcoin policy to its economy and to attract “substantial additional financial support” from the World Bank, the Inter-American Development Bank, and other regional development banks.

El Salvador will also have to strengthen regulation and supervision of digital assets “in line with evolving international best practices.”

Despite the IMF’s stance, El Salvador’s President Nayib Bukele announced another bitcoin purchase on March 3, bringing the total amount of coins on the government’s balance sheet to 6100 BTC.