El Salvador’s Bitcoin Gamble Pays Off: IMF Softens Stance Amid Strong Growth

From strong criticism to cautious recognition of the nation's better economic performance, the International Monetary Fund has significantly modified its attitude toward El Salvador's Bitcoin policy. Recent IMF Article IV papers emphasize "stronger-than-expected" growth, improved fiscal discipline, and a falling current account deficit while concentrating on controlling Bitcoin risks via greater transparency and safeguards rather than requiring the policy's undoing. This development of El Salvador in obtaining a $1.4 billion Extended Fund Facility, supported by improved macroeconomic indicators despite keeping Bitcoin as legal tender, is reflected here.

El Salvador has made realistic changes to quell IMF worries: businesses are not required to accept Bitcoin, tax payments in BTC are forbidden, and the government is in advanced talks to phase out the state-run Chivo wallet. While allowing voluntary private Bitcoin use, these concessions restrict public sector involvement. On the other hand, on-chain data shows the nation still amasses Bitcoin—holding an estimated 7,500+ BTC—as a strategic reserve, treating it as a long-term macro bet on price appreciation to lower public debt.

Driving record remittances, booming tourism owing to enhanced security, and rising investment, IMF predictions call for about 4% real GDP growth in 2025, thus supporting this changing dynamic. Reduced inflation and smaller sovereign spreads also help to boost trust. Analysts see El Salvador's approach as high-risk but potentially high-reward: continued Bitcoin gains could meaningfully ease fiscal pressures, provided volatility risks remain contained through the transparency and limits the IMF now emphasizes.