The International Monetary Fund has commended El Salvador for enhancing its economy, yet concurrently criticized the nation for its ongoing Bitcoin initiative.
In a Friday announcement, the IMF revealed that it authorized a $139 million payout to the Central American government while simultaneously attempting to “limit government participation in Bitcoin-linked operations.”
Back in 2021, El Salvador established Bitcoin as legal tender, drawing heavy criticism from the IMF and various other prominent organizations. During that period, the Latin American nation was actively discussing a development loan with the organization.
In September, the IMF noted that El Salvador was not acquiring bitcoin, though the country’s official Bitcoin Office has repeatedly maintained that purchases are indeed taking place.
The IMF stated, “Economic performance has surpassed projections, driven by continuous enhancements in public safety and investor trust, while macroeconomic discrepancies are progressively resolved.”
The statement added, “Nevertheless, specific benchmark requirements remained unfulfilled, particularly regarding bitcoin accumulation, for which exemptions were approved owing to robust remedial actions and renewed pledges.”
Additionally, the IMF indicated that government engagement in Bitcoin-oriented ventures is being rolled back and that “no further bitcoin acquisition is planned past the recorded donations.”
Salvadoran leader Nayib Bukele announced in 2022 that the nation would purchase a single bitcoin daily, though the source of funding and the veracity of the purchases remained ambiguous.
The IMF pointed out in September that El Salvador had refrained from utilizing state funds to amass bitcoin for a period, relying instead on private contributions.
In late December, El Salvador and the IMF finalized a $1.4 billion financial assistance package, though the organization urged the government to trim down specific components of its Bitcoin roadmap.
In 2021, the Salvadoran government distributed free bitcoin to its populace and launched a digital wallet to encourage wider cryptocurrency adoption within the dollar-based economy.
President Bukele acknowledged in 2024 that citizens were not adopting the cryptocurrency for everyday commerce as anticipated, but consistently emphasized that the administration continued to accumulate satoshis.
Originally published at https://bitcoinmagazine.com/news/imf-praises-el-salvador-but-blasts-bitcoin.
