El Salvador’s Bitcoin Policy Shifts as IMF Unleashes $1.4B Loan Lifeline
- Research confirms the IMF approved a $1.4 billion Extended Fund Facility loan for El Salvador on February 27, 2025, with immediate $113 million disbursed, prompting significant Bitcoin policy shifts like making acceptance voluntary and halting Chivo wallet support. This deal, unlocking over $3.5 billion in total financing, reflects El Salvador’s pivot from its bold crypto experiment amid economic pressures. An unexpected twist is Bukele’s continued Bitcoin reserve buys despite concessions, showing a defiant streak.
El Salvador, under President Nayib Bukele, made Bitcoin legal tender in 2021, a global first. The IMF’s loan approval ties to reforms scaling back this policy, balancing fiscal stability with crypto ambitions.
This shift could stabilize El Salvador’s economy but dims its crypto pioneer status. With Bitcoin at $619 million in reserves, the stakes are high—will it pay off or falter? Will Bukele’s crypto bets defy IMF pressure, or will economic pragmatism prevail?
El Salvador’s wild crypto ride just hit a major twist—the IMF approved a $1.4 billion Extended Fund Facility loan on February 27, 2025, pumping $113 million into the nation’s coffers right off the bat. This 40-month lifeline, aimed at stabilizing a shaky economy, comes with a catch: seismic shifts in El Salvador’s Bitcoin policy. After years of Nayib Bukele’s bold bet as the world’s first Bitcoin legal tender nation, the rules are changing—businesses can now opt out of accepting BTC, the Chivo wallet’s getting axed, and taxes must stick to USD. Yet, Bukele’s still stacking, with reserves at 6,053 BTC ($619 million) and counting.
The Bitcoin policy overhaul stems from a December 2024 staff-level deal, fast-tracked by a January 30 legislative vote (55-2) to ditch mandatory acceptance. The IMF’s push, per bitcoinethereumnews.com, targets fiscal health—slashing debt-to-GDP from 85% with a 3.5% GDP primary balance boost over three years. This unlocks over $3.5 billion from the World Bank and others, a massive win for a country once iced out of global markets. But Bukele’s not fully folding—his February 4 purchase of 11 BTC ($1M) shows he’s doubling down on reserves despite the Bitcoin policy rollback.
Back in 2021, El Salvador’s Bitcoin policy stunned the world, promising financial freedom. Adoption flopped—92% of Salvadorans shun BTC transactions, per a 2024 survey—yet Bukele’s 129% BTC profit keeps critics quiet. The IMF’s loan flips the script, blending crypto defiance with economic pragmatism. X buzzes with mixed takes—some cheer the cash, others mourn the pioneer’s retreat. Will Bukele’s reserve gamble outshine this pivot, or is El Salvador’s crypto crown slipping? The market’s holding its breath. https://x.com/Lutcheann