El Salvador’s Public Sector Halts Bitcoin Purchases Under IMF Deal
El Salvador agrees to stop public sector Bitcoin accumulation as part of a $1.4 billion IMF agreement to strengthen its economy.
- IMF agreement restricts El Salvador’s public sector from acquiring Bitcoin.
- The deal aims to enhance fiscal sustainability and economic growth.
- Private sector Bitcoin usage remains voluntary under the new terms
El Salvador has entered into a 40-month, $1.4 billion Extended Fund Facility (EFF) arrangement with the International Monetary Fund (IMF) to bolster the nation’s economic stability and growth prospects. A key condition of this agreement is the cessation of Bitcoin accumulation by the public sector. The IMF’s technical memorandum explicitly states that there will be “no voluntary accumulation of BTC by the public sector in El Salvador.”
Objectives of the IMF Arrangement
The IMF-supported program aims to strengthen El Salvador’s fiscal and external sustainability. This includes implementing an ambitious fiscal consolidation plan and enhancing reserve buffers. Early efforts to improve governance, transparency, and resilience are also emphasized to boost confidence and the country’s growth potential.
🇸🇻 LATEST: IMF deal will ban public sector “Bitcoin Accumulation” in El Salvador. pic.twitter.com/GeUWglHvZJ
— Cointelegraph (@Cointelegraph) March 4, 2025
Impact on Bitcoin Adoption
While the public sector is now restricted from acquiring Bitcoin, the private sector’s use of the cryptocurrency remains voluntary. This means businesses and individuals can continue to use Bitcoin for transactions if they choose, but there is no obligation to do so. The government’s participation in Bitcoin-related activities, such as issuing debt or tokenized instruments linked to Bitcoin, is also confined under the new agreement.
