IMF Waives El Salvador’s Bitcoin Purchase Breach, Approves $139 Million Disbursement

The International Monetary Fund granted El Salvador a waiver after the country breached a condition limiting additional Bitcoin purchases, and approved a $139 million disbursement.

Bloomberg reported on October 1 that the IMF’s executive board completed the second and third reviews of El Salvador’s $1.4 billion Extended Fund Facility program, clearing the payout.

The IMF said El Salvador failed to meet some performance criteria related to Bitcoin accumulation, but granted the waiver based on corrective measures and renewed policy commitments. It also reaffirmed that any further Bitcoin accumulation beyond officially confirmed donated amounts must stop.

El Salvador has continued to buy Bitcoin at the government level since adopting the token as legal tender alongside the U.S. dollar in 2021. The IMF has sought as part of the program to reduce the government’s involvement in the cryptocurrency market and cut Bitcoin-related exposure.

The IMF also cited El Salvador’s transfer of the controlling stake and operating rights in the state-run cryptocurrency wallet Chivo to a private operator. The government’s remaining related exposure should also be unwound gradually, it said.

The IMF also gave a positive assessment of El Salvador’s economy, saying activity was stronger than expected thanks to improved public security and a recovery in investor sentiment. It projects growth of 4.5% this year and 4% in 2027.

The fund said it plans to keep using the program to strengthen fiscal health, build external buffers, bolster financial-system stability and improve governance and transparency.