The International Monetary Fund (IMF) recently issued a statement confirming that the government of El Salvador has agreed, at the policy level, to stop actively increasing its Bitcoin holdings and is moving forward with plans to phase out the Chivo wallet.
Negotiations regarding the sale of the government-backed Chivo wallet have made "significant progress." According to IMF requirements, El Salvador must fully comply by the end of 2025 at the latest.
01 Progress of the Agreement
On December 23, the IMF released its latest statement, confirming that negotiations with El Salvador over the future of the government-run Bitcoin wallet, Chivo, have made "significant progress."
The core of these talks centers on either selling or gradually winding down the Chivo wallet, as part of the second review of El Salvador’s $1.4 billion extended fund facility agreement with the IMF.
The IMF emphasized that El Salvador’s government has agreed, at the policy level, to stop actively purchasing Bitcoin. This means that, at least in terms of official policy, El Salvador has committed to limiting its public sector activities in the Bitcoin market.
This development marks an important milestone in the long-standing negotiations between the IMF and El Salvador. Since El Salvador adopted Bitcoin as legal tender in September 2021, the IMF has repeatedly warned of the financial risks associated with this policy.
02 El Salvador’s Bitcoin Stance
Despite pressure from the IMF, El Salvador’s official position on Bitcoin remains somewhat contradictory.
According to data from the National Bitcoin Office of El Salvador, as of December 22, the country’s Bitcoin holdings had risen to 7,509 BTC. This figure stands in stark contrast to the IMF’s assertion that the government would "no longer actively increase" its holdings.
At the latest Bitcoin price of approximately $87,547, El Salvador’s total Bitcoin reserves now exceed $656 million.
President Nayib Bukele’s administration appears to be seeking a balance between the IMF agreement and ongoing Bitcoin acquisitions. Bukele has publicly stated: "If we didn’t stop when the world rejected us and most ‘Bitcoin users’ abandoned us, we won’t stop now—and we won’t stop in the future."
03 The Chivo Wallet Dilemma and Way Forward
Launched in September 2021 as El Salvador’s official Bitcoin wallet, Chivo has been controversial from the outset.
In its recent review report, the IMF noted that the Chivo wallet prevented El Salvador from meeting the non-accumulation targets for Bitcoin set in its agreement with the IMF. The report explained: "Fluctuations in Bitcoin-denominated deposits by Chivo customers, combined with Chivo’s liquidity management policies failing to adjust for these swings, resulted in minor conditional breaches."
The IMF’s requirements are clear: Corrective measures must be taken before any planned sale of Chivo, including establishing sufficient buffers to mitigate future compliance risks.
As part of the IMF loan agreement, El Salvador agreed to gradually withdraw its involvement with the Chivo wallet by the end of July this year.
04 IMF Concerns and El Salvador’s Economic Reality
The IMF’s concerns about El Salvador’s Bitcoin policy focus on several key areas. They worry that Bitcoin price volatility could pose risks to public finances and have consistently pushed to limit government involvement.
In a report released in November, the IMF delegation noted that Bitcoin’s status as legal tender has encouraged the use of crypto assets, including tokenized bonds, and could increase Bitcoin adoption.
In this context, risks to financial integrity and stability, fiscal sustainability, and consumer protection remain. The IMF believes that greater transparency in government Bitcoin transactions and the financial status of the state-owned Chivo wallet is still crucial.
Nevertheless, the IMF acknowledged El Salvador’s strong economic performance, with GDP growth projected to approach 4%, fiscal targets on track, rising reserves, and declining domestic borrowing.
05 Ripple Effects in the Crypto Market
Progress in negotiations between El Salvador and the IMF, along with news of a potential sale of the Chivo wallet, has subtly impacted the global cryptocurrency market.
This episode highlights the real-world challenges sovereign nations face when adopting cryptocurrencies, especially in coordinating with traditional financial institutions.
Market observers point out that El Salvador’s experience could serve as a reference for other countries considering crypto adoption. On one hand, it demonstrates how crypto technology can drive financial innovation, but it also underscores the need to respect international standards and loan conditions.
For exchanges like Gate, these developments offer valuable insights. They show that, despite international pressure, national interest and investment in cryptocurrencies remain strong.
06 Lessons from the World’s First Bitcoin Legal Tender Experiment
As the first country to make Bitcoin legal tender, El Salvador’s policy adjustments have significant implications for the global cryptocurrency landscape.
Although domestic adoption has fallen short of official expectations, this experiment has profoundly influenced how other nations approach digital currencies.
Scaling back policies under IMF pressure may offer a blueprint for others: leverage crypto technology for financial innovation, but remain mindful of international standards and lending requirements.
Stacey Herbert, Director of El Salvador’s National Bitcoin Office, stated: "Even if the Chivo wallet is sold or retired, other private-sector crypto applications can continue to operate domestically."
This shift signals a move from "full government-led initiatives" to a "private sector-driven" model, with the government stepping back.
El Salvador Bitcoin Holdings and Policy Timeline
A summary of key milestones and changes in El Salvador’s Bitcoin policy and holdings, based on publicly available data:
| Date | Bitcoin Holdings | Key Policy Changes |
|---|---|---|
| Sep 2021 | Initial purchase | Bitcoin becomes legal tender; Chivo wallet launched |
| Feb 2025 | ~6,239 BTC | $1.4 billion loan agreement reached with IMF |
| May 2025 | 6,190 BTC | IMF demands halt to public Bitcoin purchases, closure of Chivo access |
| Jul 2025 | ~5,980.77 BTC | Agreement to gradually exit Chivo wallet management |
| Dec 22, 2025 | 7,509 BTC | IMF confirms "significant progress" in Chivo sale negotiations |
Outlook
El Salvador’s Bitcoin Office continues to update daily purchase data, showing the country now holds over 7,509 BTC.
At a price of $87,547 per Bitcoin, this digital asset is valued at more than $656 million, making it a significant part of the nation’s finances.
The tug-of-war between El Salvador and the IMF is far from over. This Central American country’s attempt to balance traditional financial frameworks with crypto ambitions offers a unique case study for global observers. As the final compliance deadline approaches at the end of 2025, whether both sides can find a sustainable coexistence model will determine the ultimate outcome of this Bitcoin nation experiment.
