The International Monetary Fund (IMF) has approved a $120 million disbursement to El Salvador following a successful first review of a $1.4 billion loan agreement. This decision comes with strict conditions.
Conditions for IMF Funding
The IMF's decision is contingent upon the country meeting certain conditions, primarily scaling back its involvement in Bitcoin activities. El Salvador must fully withdraw from the state-operated Chivo wallet by the end of July.
Bitcoin Situation in El Salvador
Despite IMF warnings, El Salvador continues to increase its Bitcoin assets. President Nayib Bukele announced that the country acquires one Bitcoin per day through a special entity, maintaining a total reserve of 6190 BTC. Recently, these acquisitions have led to an unrealized profit of $386 million.
Balancing Requirements and Strategy
The IMF emphasizes the need to keep the total Bitcoin amount across government wallets unchanged. Speculation suggests that El Salvador might comply with conditions by routing future Bitcoin purchases through non-state actors. President Bukele remains firm on Bitcoin's importance to the country's economy, creating tension between his strategy and international financial demands.
El Salvador is walking a tightrope between meeting IMF requirements and pursuing its Bitcoin agenda. The outcomes of the upcoming IMF review will be crucial for the country’s financial stability.
