El Salvador Defies IMF With Bold Bitcoin Buys—Here’s Their Playbook
While the IMF clutches its pearls over monetary policy, El Salvador doubles down on Bitcoin—turning sovereign risk into a crypto experiment. President Nayib Bukele’s government keeps stacking sats, even as traditional finance jaws drop.
The loophole they won’t talk about: By treating Bitcoin as legal tender, El Salvador sidesteps IMF asset classification rules. No ‘reserve currency’ label, no compliance headaches—just cold, hard orange-pilling.
Wall Street’s worst nightmare: A developing nation monetizing volatility. Meanwhile, hedge funds still can’t decide if crypto is a ‘risk-on asset’ or a inflation hedge—maybe both?
Closing thought: When your central bank balance sheet includes laser-eyed apes, you’ve either cracked the game… or become the ultimate bagholder. Place your bets.
El Salvador’s Bitcoin strategy
Meanwhile, President Bukele remains defiantly committed to the Bitcoin strategy that has defined much of his administration’s global brand.
Back in March, Bukele publicly mocked suggestions that the Bitcoin plan would end under IMF pressure.
"’This all stops in April.’ ’This all stops in June.’ ’This all stops in December.’ No, it’s not stopping," he tweeted last month.
“This all stops in April.” “This all stops in June.” “This all stops in December.”
No, it’s not stopping.
If it didn’t stop when the world ostracized us and most “bitcoiners” abandoned us, it won’t stop now, and it won’t stop in the future.
Proof of work > proof of whining https://t.co/9pC0PoY3YQ
— Nayib Bukele (@nayibbukele) March 4, 2025
Days later, the Bitcoin Office announced further purchases, showing that the policy was alive, even if adapted.
To meet IMF conditions, El Salvador’s Legislative Assembly passed changes to its Bitcoin Law in January, stripping Bitcoin of its mandatory legal tender status for private transactions while retaining it as an optional currency.
These reforms, which take effect May 1, also eliminate Bitcoin as an accepted means for paying taxes, another concession aimed at mollifying international lenders.
Beyond the $1.4 billion IMF package, the broader agreement is expected to unlock another $2 billion in development bank financing, support fiscal consolidation efforts, and boost investor confidence as El Salvador looks to tame its debt, which hit 85% of GDP last year.
The IMF is currently preparing its first program review, which will assess El Salvador’s formal compliance and whether its Bitcoin activities undermine broader financial stability reforms.
Valdes said the IMF program aims to help El Salvador “create the conditions for stronger private investment and stronger growth,” supported by “a much better macro” and “the dividends” from improved security.
With its current holdings, El Salvador now ranks as the world’s sixth-largest sovereign Bitcoin holder, behind the United States, China, the United Kingdom, Ukraine, and Bhutan, according to Bitcoin Treasuries data.
