IMF Reforms El Salvador's Bitcoin Strategy Amid Economic Pressure

El Salvador's Bitcoin treasury strategy has been rewritten due to an agreement with the IMF. The $1.4 billion loan program forces the public sector to limit economic activities related to Bitcoin, and legislative reforms have made acceptance of the digital asset voluntary for businesses.

The government had previously required all businesses to accept Bitcoin as legal tender, but this requirement has been removed. The Chivo wallet, a state-run service for using Bitcoin, was phased out by July 2025. The IMF also prohibits the issuance of any debt denominated or indexed in Bitcoin.

The treasury holds 7,606 Bitcoins as of September 2026, and the value fluctuates daily due to market volatility. The government uses these gains to seek better loan deals and pay down national debt. However, most people use US dollars for wages, rent, tax, and public obligations.

The reliance on the US dollar is seen as the reason the system stays afloat, despite the treasury holding approximately $620 million in Bitcoin at an average purchase price of $45,200. The adoption gap between digital ambitions and rural reality remains wide, with many people lacking smartphones or internet access for digital transactions.

The volatility of Bitcoin creates instability, and the debt is high, making it difficult to manage public debt, which hit 95.4 percent of GDP in 2020. The IMF warns that massive price swings in Bitcoin could compromise the loan program, which provides essential liquidity for national economic stability and growth.