IMF to Release $120M to El Salvador, But Bitcoin Tensions Remain

The International Monetary Fund (IMF) announced on May 27 that it has reached a preliminary agreement to disburse $120 million to El Salvador as part of a larger $1.4 billion loan deal established in December 2023. The payout is contingent on the country fulfilling a set of conditions, particularly around limiting its engagement with Bitcoin and related technologies. A key condition includes El Salvador halting its involvement with the state-managed Chivo Bitcoin wallet by the end of July. The IMF also expects the total Bitcoin holdings across all government-controlled wallets to remain unchanged. “On Bitcoin, efforts will continue to ensure that the total amount of Bitcoin held across all government-owned wallets remains unchanged,” the IMF stated. The payment comes as part of a broader 40-month agreement intended to stabilize the country’s economy, in return for tighter fiscal control and policy reforms. Since the initial deal, the IMF has repeatedly advised the country to scale back its Bitcoin ambitions , emphasizing the risks involved with volatility and transparency. El Salvador Doubles Down Despite IMF Warnings However, just hours after the IMF’s announcement, El Salvador’s Bitcoin Office made it clear that the country is not backing down. In a post on X, it confirmed the purchase of additional Bitcoin, furthering the nation’s “one Bitcoin a day” acquisition strategy. According to official data, the country has acquired 30 BTC in the last month, bringing its national Bitcoin reserve to 6,190.18 BTC. President Nayib Bukele, the face of the country’s Bitcoin experiment, recently claimed on X that El Salvador’s Bitcoin treasury is sitting on an unrealized profit of $386 million—representing a 132% gain. Balancing Compliance and Crypto Ambitions This open defiance has raised questions about how El Salvador might still comply with IMF terms . Blockchain adviser Anndy Lian suggested that the government could technically follow IMF guidelines by transferring Bitcoin acquisitions to non-government entities, thus staying within legal boundaries while continuing its digital asset strategy. While the IMF confirmed that the country has been meeting key performance metrics, the continued Bitcoin purchases highlight a growing tension between traditional financial institutions and sovereign digital currency strategies. With another $1.28 billion in IMF funds still on the table, El Salvador walks a fine line—balancing economic compliance with its crypto-forward identity. The post IMF to Release $120M to El Salvador, But Bitcoin Tensions Remain appeared first on TheCoinrise.com .

Source: The Coin Rise