The International Monetary Fund (IMF) has confirmed that negotiations for the sale of El Salvador’s state-run Chivo Bitcoin wallet are “well advanced.” This move appears to be a major step in the ongoing dialogue between the country and the global lender regarding its adoption of cryptocurrency.
The IMF Loan and the Sale of Chivo
The mission chief for the IMF in El Salvador revealed that selling the government-managed e-wallet is part of a broader strategy to restructure the nation’s Bitcoin project. This development follows a significant financial agreement:
- Financial Support: In May, a deal was reached for a $1.4 billion loan agreement, with a recent payment of $120 million issued to El Salvador.
- Conditions of the Deal: As part of this arrangement, the government is expected to “wind down” its involvement in the Chivo wallet and restrict public sector engagement with Bitcoin-related economic activities.
- Voluntary Acceptance: The agreement also stipulates that private sector acceptance of Bitcoin should remain strictly voluntary.
Conflicting Reports on Bitcoin Purchases
One of the most contentious points of the IMF agreement is the requirement for El Salvador to stop acquiring Bitcoin. However, there are conflicting reports on whether this is actually happening:
- The IMF’s View: The Fund reported in July that the government had not purchased any Bitcoin since December 2024.
- The Bitcoin Office’s View: Contrasting this, El Salvador’s official Bitcoin Office continues to announce major acquisitions, including a purchase of 1,090 BTC (approx. $100 million) in November.
- Bukele’s Stance: President Nayib Bukele remains defiant, stating as recently as March that the government would continue its strategy of buying at least one BTC every single day.
Current State of El Salvador’s Bitcoin Strategy
Despite the ongoing negotiations to sell Chivo, Bitcoin remains a core part of El Salvador’s financial identity since it was recognized as legal tender in 2021.
- Total Holdings: According to data from the national Bitcoin Office, El Salvador currently holds 7,509 Bitcoin, valued at approximately $659 million.
- Uncertainty: It remains unclear how President Bukele’s commitment to daily purchases will affect the final terms of the IMF’s $1.4 billion loan package or the eventual sale of the Chivo infrastructure.
