The International Monetary Fund confirmed that negotiations for the sale or wind-down of El Salvador’s government-run Chivo Bitcoin wallet are well advanced, a development disclosed during the IMF’s second review of the 40-month Extended Fund Facility. The IMF’s update noted progress on commitments linked to El Salvador’s Bitcoin policy within the loan program. El Salvador secured a $1.4 billion loan in 2024 after prolonged negotiations over its Bitcoin adoption policies. Chivo launched in September 2021 as part of the Bitcoin rollout but drew criticism over identity theft allegations, technical failures, and frozen accounts.
The IMF said El Salvador has initiated a full phase-out of the Chivo wallet as part of the loan commitments, with private-sector Bitcoin wallets expected to continue operating. El Salvador has continued purchasing Bitcoin, including the addition of 1,098 BTC to national reserves last month, worth about $100 million at the time. El Salvador’s Bitcoin Office shows holdings of roughly 7,509 BTC, with purchases continuing daily. President Nayib Bukele publicly rejected halting purchases in March, stating the policy would continue despite external pressure.
The IMF has repeatedly warned that Bitcoin’s price volatility poses risks to public finances and urged limits on government exposure. Discussions with El Salvador remain focused on transparency, protecting public funds, and reducing financial risks. The IMF also noted positive signs in El Salvador’s broader economic performance, with real GDP growth projected near 4% this year and improving foreign reserves. Fiscal targets remain on track, and domestic borrowing has declined; the country has advanced structural reforms, including banking stability legislation, Basel III standards adoption, and updated anti-money laundering rules.
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