- El Salvador added 11 Bitcoin to its reserves, days after committing to scale back its Bitcoin adoption in an agreement with the IMF.
- The move follows an IMF-recommended reduction in public sector involvement with Bitcoin, part of a $1.4 billion loan deal with the country.
El Salvador’s Bitcoin Office revealed on January 20 that the nation has added 11 Bitcoin (BTC) to its Strategic Bitcoin Reserve. The purchase, worth over $1 million at current market rates, comes shortly after the country assured the International Monetary Fund (IMF) it would scale back its Bitcoin adoption efforts.
This development follows a December 2024 agreement with the IMF, where El Salvador pledged to curb its Bitcoin policies in exchange for a $1.4 billion loan. The deal involved ceasing mandatory Bitcoin acceptance for businesses and reducing public sector involvement in cryptocurrency activities.
Despite these commitments, El Salvador has signaled its intention to continue accumulating Bitcoin. Stacy Herbert, head of the country’s National Bitcoin Office, announced in December 2024 that the government plans to accelerate its BTC purchases. This stance underscores a divergence from the IMF’s repeated recommendations to limit public sector exposure to Bitcoin.
El Salvador’s Bitcoin journey began in September 2021 when the cryptocurrency was adopted as legal tender alongside the U.S. dollar. While the move attracted global attention, it also drew criticism, particularly from the IMF. In 2021, the organization warned that the policy raised “macroeconomic, financial, and legal issues.”
However, some of these risks have yet to manifest. In an August 2024 report, the IMF acknowledged that many concerns surrounding El Salvador’s Bitcoin experiment had not materialized but emphasized the need for greater transparency and measures to mitigate potential fiscal and financial risks. By October 2024, IMF spokesperson Julie Kozack reiterated the organization’s recommendation to limit the government’s exposure to Bitcoin.
Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by Harshajit Sarmah.
