The International Monetary Fund (IMF) seeks to restrict El Salvador’s Bitcoin buying to ensure the $1.4 billion financial aid extension. On March 3 the IMF submitted an application to extend funds to El Salvador accompanied by new documents such as updated staff report and formal statement by the executive director.

The technical memorandum of understanding states clearly that El Salvador’s public institutions must stay away from buying Bitcoin voluntarily. The memorandum forbids the Salvadoran government to issue debt or tokenized financial products that use Bitcoin as their foundation or currency.

IMF Calls for Reduced Bitcoin Engagement in El Salvador

During her interview on February 26 Méndez Bertolo confirmed that the extended fund facility can help Salvadoran authorities strengthen the economy by making it more reliable and easy to invest in. According to him Bitcoin’s negative effects can now be controlled effectively. Bertolo stated:

“The authorities enacted amendments to the Bitcoin Law that clarify the legal nature of Bitcoin and remove from the law the essential features of legal tender. Acceptance of Bitcoin will be voluntary, tax payments will be made in US dollars, and the role of the public sector in the Bitcoin project will be confined.”

The International Monetary Fund program will gain substantial extra financial support through backing provided by World Bank, Inter-American Development Bank, and regional international development banks.

The IMF now demands El Salvador to lessen its behavioral engagement with Bitcoin economic ventures. Under this agreement the IMF team helps El Salvador manage Bitcoin risks according to standard procedures and guidelines given to their administration.

El Salvador’s Bitcoin Strategy Clashes with IMF Conditions

Based on IMF insight government support of Bitcoin economic matters will stay restricted while public Bitcoin buying remains off limits. To meet international standards the country will enhance its rules that govern digital assets.

The IMF works to restrict El Salvador from using Bitcoin as currency. The agreement for $1.4 billion funds in December 2024 depended on El Salvador shifting away from Bitcoin economic operations.

The IMF’s requirements do not change President Bukele’s support for his nation’s Bitcoin policy. Bukele notified public media on March 3 that his government had purchased more Bitcoin which brought El Salvador’s total BTC reservoir to 6,100e units. The government keeps adding Bitcoin to demonstrate its strong support for Bitcoin even whn facing outside challenges.

https://twitter.com/bitcoinofficesv/status/1896748349623337050

El Salvador continues pushing its Bitcoin strategy against everything the IMF requires even though it faces loan restrictions. Although El Salvador seeks global assistance through its agreement the president expands Bitcoin purchases. The future of Bitcoin in El Salvador depends on how well it can solve economic requirements while creating safe financial rules for decentralized digital currencies.