IMF Approves Loan to El Salvador, Cautions Against Further Bitcoin Accumulation
The International Monetary Fund (IMF) has approved a $139 million disbursement to El Salvador while also expressing concerns about the country's ongoing Bitcoin project.
El Salvador made Bitcoin legal tender in 2021, which was met with criticism from the IMF and other major institutions. The country had been negotiating a development loan with the agency at the time.
The IMF stated that economic activity has exceeded expectations due to improvements in security and investor confidence, but noted that certain performance criteria were not met, including on the Bitcoin accumulation front. Waivers were granted based on strong corrective measures and renewed commitments.
The IMF is now asking El Salvador to scale back its involvement in Bitcoin-related activities, stating that no further bitcoin accumulation is envisaged beyond documented donations. The country had been accumulating Bitcoin through public funds, but it was later revealed that the money came from private donations.