Did El Salvador Outsmart the IMF with Bitcoin?

El Salvador made waves in 2021 as the first nation to adopt Bitcoin as legal tender. President Nayib Bukele pitched it as a way to ditch the US dollar and cut remittance costs. 

But did the country fake Bitcoin buys to secure a $1.4 billion IMF loan? Let’s dive into this wild saga.

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The Bitcoin Experiment Begins

El Salvador grabbed headlines by making Bitcoin legal tender. Bukele’s plan included the Chivo Wallet, Bitcoin ATMs, a tax-free “Bitcoin City,” and $1 billion “Volcano Bonds” to fund it all. The goal? Boost the economy and attract crypto fans. It sounded revolutionary.

Daily Bitcoin Buys

In November 2022, Bukele promised to buy one Bitcoin daily. For over two years, the government shared updates on social media, using platforms like Nayib Tracker to flaunt growing reserves. Crypto enthusiasts cheered, calling El Salvador a trailblazer for defying traditional finance.

Read Also: El Salvador Buys More Bitcoin! Ignores IMF Warnings

Economic Struggles Behind the Scenes

Despite the hype, El Salvador faced serious financial woes by 2024. Rising debt, a growing budget deficit, and stalled projects like the glitchy Chivo Wallet hurt the economy. 

Tourism ticked up slightly, but the Bitcoin plan didn’t deliver the expected economic boost.

Turning to the IMF

Desperate for funds, El Salvador quietly negotiated with the IMF, an organization it once criticized. 

In December 2024, it secured a $1.4 billion loan with strict conditions: halt Bitcoin purchases, make its use optional, limit Chivo Wallet control, and increase transparency.

The Big Reveal: No New Bitcoin Buys

In July 2025, an IMF review dropped a bombshell: El Salvador hadn’t bought Bitcoin since February 2025, just weeks after the loan deal. 

A footnote revealed the “growing reserves” were just old Bitcoin shuffled between wallets, not new purchases or market gains.

Mixed Messages

While complying with IMF rules, Bukele and the National Bitcoin Office kept posting as if daily buys continued. 

The central bank president and finance minister even signed a letter confirming no new purchases, exposing a gap between public claims and reality.

Read Also: Is El Salvador Breaking International Rules?

A Clever Strategy or Deception?

El Salvador’s leaders faced a dilemma: admit they paused Bitcoin buys and risk their bold, tech-savvy image, or keep the crypto hype alive while securing IMF funds. 

They chose both, quietly following IMF rules while publicly acting committed to Bitcoin.

Why Keep Up the Act?

Bukele’s Bitcoin push branded El Salvador as a rebel against global finance. Admitting a retreat could hurt public support and scare off crypto tourists. 

By maintaining the narrative, the government secured over $2 billion from the IMF, World Bank, and IDB while keeping its crypto cred.

Lessons for Other Nations

El Salvador’s story warns countries eyeing Bitcoin as policy. It showed promise but crumbled under debt and weak infrastructure. 

The tech works, but without transparency and solid systems, it’s a risky bet. Other nations in Africa or Latin America should take note.

Bitcoin’s Limits as Policy

Can Bitcoin really be a national currency? El Salvador’s retreat suggests it’s tough when real-world pressures hit. 

Governments might use crypto for clout or to delay tough choices, but without a strong foundation, the hype fades fast.

Read Also: El Salvador Adds 8 Bitcoin in Seven Days, Total Holdings Reach 6,194.18 BTC

Conclusion

El Salvador didn’t outright scam the IMF, but it played a clever game. It followed loan rules privately while keeping the Bitcoin dream alive publicly. 

The July 2025 IMF report exposed the truth, showing the experiment’s limits. Bitcoin brought buzz, but debt and reality forced a quiet pivot. The lesson? Bold moves need solid plans to last.

FAQ

Did El Salvador really buy Bitcoin daily?

No. After February 2025, no new purchases were made. The “daily buys” were just old coins moved between wallets.

Why did El Salvador stop buying Bitcoin?

IMF loan conditions required halting Bitcoin purchases, making its use optional, and boosting transparency.

How much did El Salvador secure from the IMF?

The country landed a $1.4 billion loan in December 2024 under strict conditions.

Was the Chivo Wallet successful?

No. It faced glitches and low adoption, failing to deliver the promised economic benefits.

Did Bitcoin improve El Salvador’s economy?

Not really. Tourism rose slightly, but debt and budget deficits remained major problems.

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