IMF Grants El Salvador Waiver on Bitcoin Breach with Strict Conditions

El Salvador has received a waiver from the International Monetary Fund (IMF) regarding breaches related to its Bitcoin holdings, despite ongoing concerns over the country’s crypto strategy. The IMF approved a $139 million disbursement following the completion of the second and third reviews of El Salvador’s $1.4 billion credit facility. The waiver comes with strict conditions, including a directive for the government not to accumulate more Bitcoin unless through documented donations.

The IMF’s decision follows El Salvador’s adoption of Bitcoin as part of its financial reserves in 2021, a move that has drawn scrutiny from the financial regulator. The IMF had previously warned the country about exposing public funds to cryptocurrency volatility. Despite this, El Salvador has continued to invest in Bitcoin, holding 7,787.37 BTC, valued at approximately $658 million. Recent purchases include 8 BTC two weeks ago and 31 BTC in the past 30 days.

The IMF’s waiver is contingent on increased transparency in El Salvador’s Bitcoin holdings and a commitment to reduce government involvement in crypto activities. While the waiver allows the country to address past breaches, the restriction on further Bitcoin accumulation may limit future demand and impact Bitcoin adoption in the region.