IMF Slaps Conditions on $138 Million Bailout for El Salvador
The International Monetary Fund (IMF) has released $138 million to El Salvador as part of its loan program, but with conditions attached. The IMF wants the government to limit its Bitcoin holdings to documented donations and step back from running crypto infrastructure.
The fund is trying to build a 'bitcoin firewall' to prevent volatile crypto bets from spilling into the public balance sheet. This would make it easier for investors to measure and price El Salvador's creditworthiness based on traditional factors like fiscal policy, foreign-currency liquidity, and institutional reforms.
The IMF has already granted waivers after El Salvador missed crypto-related targets, but it reiterated that no further Bitcoin accumulation is envisioned beyond documented donations. The fund also wants the state to shrink its role in running digital-asset activity and tighten rules for public-sector crypto holdings.