The International Monetary Fund (IMF) Adopts Lighter Tone Towards El Salvador and Its Bitcoin Law

International Monetary Fund IMF

The International Monetary Fund (IMF) stated that if El Salvador does not repeal the Bitcoin law, which makes it legal tender in the country, it should at least reduce it as a condition for reaching an agreement to receive around $1.3 billion in financing.

This is a different strategy as the IMF has consistently opposed El Salvador’s Bitcoin project since Bukele declared it a legal tender in 2021.

What we have recommended is a narrowing of the scope of the Bitcoin law, strengthening the regulatory framework and oversight of the Bitcoin ecosystem, and limiting the public sector exposure to bitcoin. Julie Kozack, IMF’s Director of Communications.

These remarks by Kozack mark a shift in the International Monetary Fund’s approach towards El Salvador and Bitcoin as a legal tender. Since 2021, IMF representatives have called for the Bitcoin law to be abolished altogether as a way of getting IMF’s financing.

It seems unlikely that the Bukele administration will accept the IMF’s recommendations regarding Bitcoin.

Thus far President Bukele has disregarded the IMF’s recommendations and has no reason to start now as Bitcoin is performing well.

As of October 2024, El Salvador possesses 5,890.76 Bitcoins, valued at around $360,614,620 million.

Forbes.com reported that “Despite looking for resources, El Salvador’s president announced that the national budget 2025 won’t include the issuance of new debt, so they may be prepared for not receiving new funds from the IMF.”  

The Salvadoran Central Reserve Bank (BCR) projects that El Salvador’s economy will grow between 3.0% and 3.5% in 2024.