The International Monetary Fund has praised El Salvador for improving its economy — but scolded it at the same time for its ongoing Bitcoin experiment.
In a statement Friday, the IMF said that it had approved a $139 million disbursement to the Central American nation while also trying to “reduce the state’s involvement in Bitcoin-related activities.”
El Salvador in 2021 made Bitcoin legal tender, much to the ire of the IMF and other major institutions. The Latin American country was at the time negotiating a development loan with the agency.
The IMF in September said that El Salvador wasn’t buying bitcoin; the country’s Bitcoin Office has repeatedly said that it does buy the cryptocurrency.
“Economic activity has exceeded expectations, supported by sustained improvements in security and investor confidence, as macroeconomic imbalances continue to be addressed,” the IMF said.
It continued: “However, certain performance criteria were not met, including on the Bitcoin accumulation front, for which waivers were granted based on strong corrective measures and renewed commitments.”
The IMF further said that the Salvadoran state’s involvement in Bitcoin-related activities is being unwound and that “no further bitcoin accumulation is envisaged beyond the documented donations.”
Salvadoran president Nayib Bukele in 2022 said the country would buy one bitcoin per day but it was never clear where the money was coming from — or if he was actually buying at all.
The IMF said in September that El Salvador was — at least for some time —not using public funds to accumulate bitcoin but rather had received bitcoin from private donations.
El Salvador and the IMF entered a $1.4 billion loan agreement at the end of December but the fund asked for the country to scale back certain aspects of its Bitcoin strategy.
The Salvadoran state gifted its citizens bitcoin in 2021 and debuted a wallet with the hope of getting more citizens using the cryptocurrency in the dollarized country.
President Bukele in 2024 admitted that Salvadorans weren’t using the cryptocurrency to buy things as expected, but always boasted that the government was still stacking sats.