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El Salvador has once again been in the spotlight when it comes to cryptocurrency news. Recent data suggests that the country has been steadily increasing its Bitcoin holdings despite a prior agreement made with the International Monetary Fund (IMF) to cease doing so.
El Salvador was the first country in the world to adopt Bitcoin as a form of legal tender, and, as can be expected, the country has a very pro-cryptocurrency outlook. Residents of El Salvador can pay their taxes in Bitcoin, and, until recently, no business was allowed to refuse it as a payment method. The reasons for this adoption are many and complex, but overall, the government of El Salvador hoped that the adoption of Bitcoin would increase economic development in the country.
It is not just El Salvador, either, that has taken a country-wide adoption of cryptocurrency, with Bitcoin at the centre. Here in the States, over 28% of American adults own cryptocurrency, and almost all adult residents have access to the best crypto coins to buy. According to crypto expert Ines S. Tavares, Bitcoin remains a good investment option.
Despite its pro-crypto currency stance, in February 2025, El Salvador recently made a deal to halt its acquisition of Bitcoin. This deal involved them accepting a $1.4 billion loan, also known as an Extended Fund Facility (EFF) from the IMF, under multiple conditions including Bitcoin acceptance becoming optional for private companies in El Salvador and the government no longer purchasing Bitcoin using public funds. Despite this deal, the country has continued to increase its holdings through unofficial channels.
Recent blockchain analysis, which reveals that El Salvador’s Bitcoin holdings have continued to grow even after the deal was made, provides subtitle evidence for this. However, experts have suggested that it is likely that these assets were not purchased by public funds, as stipulated in the deal, but instead came from various cryptocurrency investments and other private funds owned by the government of El Salvador.
In response, the IMF has stated that as long as El Salvador continues not to use public funds for its acquisition of Bitcoin, it will remain in compliance with the deal. This being said, compliance is a tricky word, and it is clear that the government of El Salvador is testing the limits of the conditions placed upon them. Most other countries tend to comply with the stipulations placed upon them by the IMF, but El Salvador has continued to purchase Bitcoin, clearly testing, if not defying, expectations regarding its future policy direction.
El Salvador currently has a supply of Bitcoin worth $550m, and since the number is still steadily increasing after the IMF deal, it seems clear the country has no real intention of abandoning its much-loved Bitcoin strategy. Not only that, but recent blockchain activity suggests that the country is taking in around one Bitcoin a day through non-administrative channels. It is clear, then, why many people believe that, although there have been no direct breaches of the deal, El Salvador’s actions are nevertheless contrary to the spirit of the agreement.
Roderigo Valdes, the head of the IMF’s Western Hemisphere Department, has spoken up about the deal and assured people that at the moment, El Salvador has remained within the parameters of the stipulations placed upon it at the end of the four-year negotiation period leading up to the deal. He also drew attention to the fact that the program and the IMF’s intentions do not solely focus on Bitcoin but take into account much broader structural reforms that center around governance and transparency.
