IMF Seals $1.4B Deal—Bitcoin Use Tightened in El Salvador

El Salvador has reached a $1.4 billion deal with the International Monetary Fund (IMF), a big step towards fiscal stability.

Written by: Arslan Butt • Wednesday, May 28, 2025 • 2 min read

Quick overview

El Salvador has secured a $1.4 billion deal with the IMF, pending Executive Board approval, aimed at achieving fiscal stability.
The agreement includes a $120 million immediate disbursement and access to up to $3.5 billion from multiple creditors under the Extended Fund Facility.
Key conditions of the deal require El Salvador to halt state-funded Bitcoin purchases and implement various fiscal and structural reforms.
Despite the IMF's restrictions on Bitcoin, President Bukele remains committed to maintaining the country's crypto identity.

El Salvador has reached a $1.4 billion deal with the International Monetary Fund (IMF), a big step towards fiscal stability. The deal is still subject to IMF Executive Board approval and has been months in the making. The agreement includes a $120 million immediate disbursement and is under the IMF’s Extended Fund Facility (EFF) which is 40 months and has access to up to $3.5 billion from multiple creditors.

IMF support is crucial to stabilize El Salvador’s economy but the conditions are tough—chief among them, no more state funded Bitcoin purchases. This is a strategic compromise as the IMF wants to reduce crypto involvement to have macroeconomic discipline and global investor confidence.

Key figures:

$1.4B IMF loan program

$3.5B total support including other creditors

$120M immediate disbursement approved

Bitcoin Restrictions Tightened

Despite President Nayib Bukele’s love for Bitcoin, the IMF has been cautionary for a long time. The new agreement requires El Salvador to:

Stop all public funding for further Bitcoin accumulation
Close public access to the government run Chivo wallet by July 1, 2025
Freeze Bitcoin reserves in state owned wallets at current levels

The IMF believes Bitcoin’s volatility is a risk to financial stability. El Salvador currently holds 6,190.18 BTC worth approximately $675 million with unrealized gains of $350 million but that hasn’t changed the IMF’s stance.

President Bukele is defiant:

“If it didn’t stop when the world ostracized us… it won’t stop now.”

The government will keep its crypto identity but under tighter control.

Reforms Needed for Next Tranche

The next $120 million disbursement is conditional on El Salvador implementing:

Fiscal restructuring
Bank liquidity enhancement
Civil service and pension reforms

These are the conditions to unlock the rest of the $3.5 billion. The IMF is encouraging a broader economic modernization strategy and warned that future support is conditional on all agreed conditions.

The press release ends:> “EFF approved with SDR 1033.92 million (about $1.4B)… Other creditors will add about $2.1B more.”

Now it’s up to El Salvador to balance Bitcoin with structural reforms.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.