El Salvador's Bitcoin Acquisition Raises Questions Amid IMF Agreement

According to Cointelegraph, El Salvador, the pioneering nation in adopting Bitcoin as legal tender, has reportedly acquired over $100 million in Bitcoin (BTC), despite previous commitments to the International Monetary Fund (IMF) to limit public exposure to the cryptocurrency as part of a loan agreement. Data from El Salvador’s Bitcoin Office indicates that the government purchased 1,090 BTC, valued at more than $100 million, on Tuesday. This acquisition follows the IMF's July report, which stated that El Salvador had not made any new Bitcoin purchases since the approval of a $1.4 billion loan program at the end of 2024. El Salvador’s Bitcoin reserve data reveals a significant increase in holdings, from 5,968 BTC on December 18, 2024, when the government finalized its deal with the IMF, to over 7,474 BTC following the latest purchase announcement. Despite Bitcoin's recent decline, falling 28% from an all-time high of over $126,000 in early October to $96,000 at the time of writing, the country's reserves are valued at approximately $683 million. The acquisition has sparked discussions, particularly following comments from Quentin Ehrenmann, general manager at My First Bitcoin, a non-governmental organization focused on Bitcoin adoption. Ehrenmann noted that El Salvador's Bitcoin reserve has had limited impact on the broader population, stating that since the government entered into the IMF agreement, Bitcoin is no longer legal tender, and there have been no significant efforts to educate the public. He remarked, "The government, apparently, continues to accumulate Bitcoin, which is beneficial for the government — it’s not directly good for the people." The IMF and Salvadoran government did not respond to Cointelegraph’s requests for comment by the time of publication. Despite the IMF's request in early March for El Salvador to restrict Bitcoin purchases in line with the loan agreement, data suggests continued accumulation of BTC by the government. A letter of intent signed by El Salvador’s central bank president and Minister of Finance, referenced in the July IMF report, claimed no Bitcoin purchases had been made since the 2024 loan. The report highlighted discrepancies in Chivo's Bitcoin reserves, leading to minor misunderstandings about public sector accumulation. The letter assured that steps are being taken to mitigate fiscal risks by reducing the public sector’s involvement in the Chivo wallet and reframing the Bitcoin project. These assurances preceded the latest substantial Bitcoin purchase, raising questions about El Salvador's adherence to the IMF agreement and the reporting of its Bitcoin reserves.