$1.14B IMF Talks Put Spotlight on El Salvador’s Bitcoin Strategy
El Salvador's bitcoin strategy is on a knife-edge right now, with the International Monetary Fund (IMF) saying that some progress...
Quick overview
- El Salvador's negotiations with the IMF regarding its bitcoin strategy and the Chivo e-wallet are progressing positively.
- The country is seeking a $1.14 billion loan under the Extended Fund Facility to support economic reforms and financial stability.
- Despite an agreement to pause aggressive bitcoin purchases, El Salvador has increased its holdings to 7,508 BTC, including a recent $100 million purchase.
- The IMF forecasts a 4% GDP growth for El Salvador this year, driven by remittances and local investments, while the government aims to reduce its deficit and enhance social program spending.
El Salvador’s bitcoin strategy is on a knife-edge right now, with the International Monetary Fund (IMF) saying that some progress is being made in its talks with the government. The IMF is looking at El Salvador’s bitcoin project and the sale of the Chivo e-wallet as part of the negotiations. El Salvador is trying to address transparency and financial risk issues that have been holding up its request for a $1.14 billion loan under the 40-month Extended Fund Facility (EFF) program.
IMF officials have told us that the negotiations over the sale of the Chivo wallet are going well and that they remain very engaged in talks with the government about its bitcoin project. They are particularly keen to ensure that the government is doing everything it can to protect public finances and manage financial risk.
Economic Outlook and Loan Terms
The EFF program is a key part of El Salvador’s financial plans. It was approved earlier this year, and the $1.14 billion loan will go some way toward supporting the country’s economic reforms and ensuring its financial stability. As part of the deal, the government agreed to hold off on its very aggressive bitcoin accumulation strategy for a while and to start allowing private-sector companies to use bitcoin as legal tender.
🇸🇻 NEW: The IMF says El Salvador's economy is expanding faster than anticipated with GDP projected to reach ~4% this year.
Bitcoin project discussions will continue focusing on transparency. pic.twitter.com/EvS2vaTyXI
— Cointelegraph (@Cointelegraph) December 23, 2025
- The Loan: $1.14 billion
- How long for: 40 months
- What it’s all about: Getting the books in order, making sure we don’t take on too much risk, and sorting out the country’s finances.
The government has, however, made a few more bitcoin purchases since the agreement was signed – data from Arkham Intelligence shows that they now hold a total of 7,508 BTC, including a big $100 million purchase last month.
Growth Prospects and Keeping the Books Balanced
The IMF is pleased with the way El Salvador is doing economically – they think the country will see real GDP growth of 4% this year, thanks to all the remittances that are coming in, growing investor confidence, and more investment by locals.
IMF and El Salvador continue negotiations over Bitcoin risks
El Salvador’s talks with the IMF progress as the country looks to unlock more funds from a $1.4B loan tied to limits on public-sector Bitcoin use.
— crypto.news (@cryptodotnews) December 23, 2025
The government is also making sure they keep their finances in order, which is great – it is aiming to meet its end-of-2025 target for reducing the deficit while increasing spending on social programs in the 2026 budget.
- GDP Forecast 2025: about 4%
- What will drive Growth: Remittances, investment, and the government keeping its finances under control
- Budget Outlook: We will be cutting the deficit while spending more on social programs
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