El Salvador’s Bitcoin policy is in the news again, but this time, it’s because of a deal with the International Monetary Fund (IMF). The country got an IMF Extended Fund Facility worth $1.4 billion for 40 months to help keep its finances stable. El Salvador promised not to get more Bitcoin as part of the deal. Even so, recent news reports say that the country’s Bitcoin reserves have grown, making people wonder if this aligns with the IMF’s rules.
Agreement: No Bitcoin Accumulation
El Salvador’s agreement with the IMF included a Memorandum of Economic and Financial Policies. In this document the government clarified that they would not grow their Bitcoin holdings. Central Bank President Douglas Pablo Rodríguez Fuentes and Minister of Finance Jerson Rogelio Posada Molina signed the paper, which made this promise official. This condition was reaffirmed in the IMF’s staff report, which came out in March. It said that El Salvador’s government had decided to stop Bitcoin accumulation during the program’s duration.
Debate Over President Bukele’s Statement
Even though they said they would keep their promise, President Nayib Bukele noted in a post on X (formerly Twitter) that Bitcoin buildup is “not stopping.” After this unexpected comment, people began to wonder if El Salvador was breaking its agreement with the IMF. They wondered if the government was planning to get around the rule that people couldn’t buy Bitcoin or if there had been a mistake about what the rule meant.
IMF’s Flexible Bitcoin Purchase Interpretation
In answer to questions, the IMF’s communications department clarified things. They said that the rule applies to the whole public sector’s ability to accumulate Bitcoin. The latest Bitcoin purchases, on the other hand, came from El Salvador’s Strategic Bitcoin Reserve Fund. According to the IMF, this does not go against the agreed-upon program conditions. This leads to a more open-ended reading of the contract, letting people buy Bitcoin in some situations.
Conclusion
The recent increase in Bitcoin holdings in El Salvador has started a new discussion about the IMF’s rules and how the government interprets financial obligations. The IMF says that Bitcoin purchases are within the agreed-upon guidelines, but critics say this could be a way for the country to keep adding to its Bitcoin holdings.
