El Salvador’s Bitcoin strategy faces significant hurdles from the International Monetary Fund (IMF) and has seen limited public adoption, according to a local NGO report.
According to My First Bitcoin, a non-profit organization, the Bitcoin venture in El Salvador appears to be in trouble due to a loan agreement with the International Monetary Fund (IMF) and decreased public engagement.
The IMF agreement has resulted in the stagnation of government-sponsored education and adoption initiatives, according to Quentin Ehrenmann, the organization’s general manager, which has left ordinary citizens behind.
Ehrenmann informed Reuters that Bitcoin is no longer considered a lawful tender due to the government’s agreement with the IMF. He also stated that there has been no additional effort to educate the public.
Bukele Talks Bitcoin, But IMF Deal Blocks New Purchases
Although President Nayib Bukele’s administration has continued to boast about its Bitcoin holdings, the International Monetary Fund (IMF) disclosed that El Salvador consented to refrain from purchasing additional Bitcoin as part of the agreement.
This contradicts the country’s Bitcoin Office’s assertion that daily purchases were ongoing.
Ehrenmann stated, “The government appears to be continuing to accumulate Bitcoin, which is advantageous to the government but not directly beneficial to the public.”
The country’s legislature implemented a plan in January to reduce the public sector’s involvement in Bitcoin to comply with the International Monetary Fund’s loan conditions.
The change has prompted inquiries regarding the long-term sustainability of El Salvador’s crypto policy and whether the initial vision has been quietly shelved.
The IMF has clarified that the Chivo wallet, which was previously promoted as a central component of the country’s Bitcoin adoption, will be decommissioned from public control. The wallet will continue functioning but must be privatized entirely and be no longer reliant on government funds.
According to the El Salvador Bitcoin Office, El Salvador currently possesses approximately 6,244 BTC, equivalent to roughly $742 million.
Some blockchain analysts, such as Arkham, have observed consistent transfers of 1 BTC per day from exchanges such as Binance and Bitfinex to addresses purportedly associated with the Salvadoran government.
Nevertheless, it is uncertain whether these are official purchases or private transactions.
Governments and Institutions Continue Bitcoin Buys
Other governments and corporations are expanding Bitcoin treasuries. Metaplanet, a Japanese company, recently acquired 797 Bitcoin for $93.6 million.
In the interim, the Smarter Web Company in the UK and The Blockchain Group in France collectively contributed more than 340 BTC.
In the second quarter of 2025, Strategy, the first Bitcoin treasury corporation, reported $14 billion in unrealized gains.
According to Ran Neuner, a crypto analyst, crypto treasury firms are behaving more like exit vehicles for crypto insiders than as purchasers, as previously reported.
Rather than purchasing assets directly from exchanges, these companies frequently accept crypto contributions from existing holders in exchange for shares that trade at substantial premiums on public markets.
The crypto treasury trend is also facing increasing skepticism regarding its sustainability.
James Check, the lead analyst at Glassnode, expressed apprehension regarding the sustainability of the corporate Bitcoin treasury strategy last month. He contended that the facile gains that new entrants may have experienced may have evaporated as the market matures.
