IMF Presses El Salvador to Defuse Bitcoin Gamble While Keeping Program Cash Flowing

Still negotiating over how to minimize the risks of El Salvador's Bitcoin experiment while maintaining access to a $1.4 billion Extended Fund Facility, the IMF and El Salvador are a 40-month program that expressly links future payments to digital-asset changes, including actions to reduce public-sector Bitcoin exposure and boost openness. Without endangering macrofinancial stability or the IMF program, the goal is to let Bitcoin remain in a restricted role, especially in the private sector and as a little reserve asset.

The fate of the state-run Chivo wallet and the government's more general participation in Bitcoin infrastructure are key themes of the discussions. Consistent with IMF advice to reduce government-sector participation and prevent growing sovereign BTC holdings, talks on selling or divorcing Chivo are termed "well advanced." Acceptance of Bitcoin by companies under the staff-level agreement is to be optional; the state's use of BTC for taxes, payments, and day-to-day operations will be strictly limited to cap overall exposure.

The IMF keeps stressing well-known risk areas: financial stability, fiscal volatility from holding BTC on the public balance sheet, AML/CFT vulnerabilities, and consumer‑protection gaps. IMF Directors welcomed measures already adopted but urged continued reduction of public‑sector involvement and more open communication on Bitcoin policy in its 2025 Article IV and first review. Talks are still described as ongoing as of December 2025 but "well advanced," with IMF disbursements and the general trajectory of the program intimately related to Bitcoin‑risk reduction, legal‑tender modifications, and the Chivo exit date.