El Salvador has secured access to an immediate $138 million (equivalent to SDR 101.96 million) after the International Monetary Fund (IMF) completed the second and third reviews of the nation's $1.4 billion loan program on Oct. 1. The IMF Executive Board granted waivers for previously unmet performance criteria tied to national Bitcoin (BTC) accumulation, allowing funds to flow while enforcing strict boundaries on future acquisitions.
Key Takeaways
- Immediate Funding: The IMF approved $138 million following completion of the second and third reviews under its 40-month Extended Fund Facility established in February 2025.
- Treasury Valuation: El Salvador currently holds 7,794.37 Bitcoin, worth approximately $666.1 million.
- Accumulation Restrictions: The agreement prohibits publicly funded purchases, allowing reserve expansion strictly through documented donations.
- Chivo Unwind: Government authorities transferred majority ownership of the state-backed Chivo wallet to a private operator to limit public exposure.
IMF Waivers and Accumulation Limits
The IMF board agreed to grant waivers after President Nayib Bukele's government implemented corrective measures regarding state crypto holdings. Under the renewed terms of the $1.4 billion program, El Salvador is forbidden from using public money to expand its treasury, meaning reserve totals may only increase through verified donations.
Concerns had mounted following previous balance increases, including a addition of 1,540 Bitcoin, which raised questions over compliance. However, the distinction between state-funded buying and external donations allowed the IMF to proceed, even as Cathie Wood warns surging US dollar could pressure gold and test Bitcoin across global macro markets.
Structural Reforms and Chivo Wallet Unwind
Beyond treasury restrictions, the IMF noted that fiscal consolidation is progressing in line with program targets, with reserve and liquidity metrics comfortably achieved. As part of its commitments to diminish direct state involvement in digital assets, El Salvador transferred majority ownership and operational control of the Chivo wallet to a private firm.
Nevertheless, the IMF emphasized that further action is necessary to fully eliminate remaining public-sector exposure. Financial regulators are requiring El Salvador to improve public disclosure of sovereign crypto reserves, overhaul governance rules for digital asset service providers, and amend its Digital Asset Issuance Law. Future disbursements under the 40-month Extended Fund Facility will depend on continuous compliance with these transparency mandates, especially as Bitcoin faces $87,500 resistance in broader spot markets.
Why It Matters
This approval demonstrates that sovereign nations can maintain official crypto exposure while remaining inside traditional multilateral lending frameworks. By drawing a firm line between public fund expenditures and voluntary donations, the IMF has created a rigid legal template for crypto-holding states. El Salvador gains vital liquidity while proving that fiscal discipline and digital treasury assets can coexist under tight international surveillance.
