El Salvador Continues Bitcoin Acquisition While Maintaining IMF Compliance
El Salvador has acquired 7 Bitcoin worth over $650,000 in the week leading up to April 27, according to blockchain data from the country's Bitcoin Office. This acquisition comes despite an agreement with the International Monetary Fund (IMF) that appeared to restrict such purchases.
During an April 26 press briefing, Rodrigo Valdes, director of the IMF's Western Hemisphere Department, confirmed that El Salvador continues to comply with its commitment of "non-accumulation of Bitcoin by the overall fiscal sector." This is a performance criterion included in their agreement with the IMF.
Valdes also noted that El Salvador's program with the IMF extends beyond Bitcoin. "The program of El Salvador is not about Bitcoin. It's much more, much deeper in structural reforms, in terms of governance, in terms of transparency," he stated.
In December 2024, El Salvador reached a deal with the IMF for a $1.4 billion loan. The agreement required the government to drop Bitcoin's status as legal tender and halt its Bitcoin accumulation. Nevertheless, recent blockchain data shows continued Bitcoin purchases.
Despite the government's continued interest in Bitcoin, implementation challenges persist. Data from the Central Reserve Bank reveals only 20 of 181 registered Bitcoin service providers (11%) are currently operational, with the remaining 89% failing to meet regulatory requirements established under the Bitcoin Law.
The apparent contradiction may be explained by a flexible interpretation of the IMF agreement. According to Anndy Lian, author and intergovernmental blockchain adviser, the agreement may leave room for purchases through non-governmental entities.
"The IMF's 'flexible interpretation' suggests purchases may involve non-public sector entities or reclassified assets, maintaining technical compliance," Lian told Cointelegraph. He added that this approach allows El Salvador to maintain its Bitcoin-friendly image while securing IMF funding to address public debt and limited reserves.
Lian further noted that El Salvador's strategy exemplifies the growing tension between financial innovation and traditional economic policies, offering lessons for other nations exploring cryptocurrency adoption.
