El Salvador’s President, Nayib Bukele, surprised many on March 4 when he declared that his government would continue buying Bitcoin, despite conditions set by the International Monetary Fund (IMF).
Does the IMF Agreement Prohibit El Salvador from Buying More Bitcoin?
🇸🇻El Salvador buys another bitcoin for strategic reserve. pic.twitter.com/pyWepGk8bL
— The Bitcoin Office (@bitcoinofficesv) March 4, 2025
In January, El Salvador signed a $1.4 billion loan agreement with the IMF. One of the conditions of this deal was that the government would stop investing in Bitcoin and would no longer classify it as mandatory legal tender.
On March 3, the IMF released a report confirming that the Salvadoran government and state-controlled entities were not allowed to buy or mine Bitcoin. However, just a day later, Bukele took to social media, stating that El Salvador would still accumulate more Bitcoin.
Is Bukele Violating the IMF Agreement?
Many believe Bukele’s actions contradict the IMF’s conditions. However, loopholes may allow Bitcoin purchases without breaking the deal:
- The law is not active yet – The new policy removing Bitcoin’s legal tender status passed on January 29 but will take effect on April 30.
- Alternative funding sources – Some experts suggest the government uses funds from state-owned enterprises or pre-approved budgets for Bitcoin purchases.
- No direct IMF objection – Reuters reports that the IMF reviewed El Salvador’s recent Bitcoin transactions and found no violations of the agreement.
Why Did El Salvador Need the IMF Loan?
Despite Bukele’s strong support for Bitcoin, the fact remains that his government proactively approached the IMF for financial assistance.
Some experts argue that El Salvador was forced to accept the agreement because of worsening financial conditions. The country’s public debt has been rising, yet many citizens still believe it has either remained stable or decreased.
Anonymous financial expert Unseen Finance stated that El Salvador’s economy is in serious trouble, with poverty on the rise. As a result, the government had little choice but to comply with the IMF’s conditions.
Is Bukele Challenging the IMF?
Bukele’s decision raises questions. Is he exploiting a legal loophole, or is he testing the IMF’s patience?
Although Bitcoin purchases remain small, they could still attract scrutiny. If Bukele continues, will the IMF tighten restrictions, or will El Salvador keep its Bitcoin strategy alive?
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