El Salvador’s Bitcoin strategy has taken a surprising turn. For months, President Bukele and the National Bitcoin Office claimed daily Bitcoin purchases, with public trackers showing over 6,102 BTC. But a recent IMF report reveals a different story.
The Illusion of Buying
The IMF’s report states that El Salvador hasn’t actually bought any new Bitcoin since December 2024, when they secured a $1.4 billion loan. The increase in publicly reported Bitcoin holdings was simply due to internal transfers between government wallets. These transfers created the illusion of new purchases, without actually spending any new taxpayer money. Even fluctuations in the Chivo e-wallet balance were due to internal adjustments, not new deposits. Essentially, the IMF forced El Salvador to stop buying Bitcoin as a condition of the loan.
The Legal Tender Reversal
Remember when El Salvador made Bitcoin legal tender in 2021? That decision caused quite a stir. However, under pressure from international lenders, El Salvador reversed this decision in January 2025, ending the use of public funds for Bitcoin purchases. The IMF report confirms this.
The Chivo E-Wallet’s Demise
El Salvador is under pressure to completely shut down its involvement with the Chivo e-wallet by July 31, 2025. They also need to wind down Fidebitcoin, the public Bitcoin trust. These actions are meant to improve financial transparency and maintain the terms of their IMF loan.
Trust and Transparency Under Scrutiny
The whole situation raises serious questions about trust and transparency. The government’s actions have damaged its credibility. The discrepancy between what was claimed and the reality has highlighted the importance of accurate data reporting. While the IMF acknowledges El Salvador’s progress on meeting loan targets, the coming weeks will be crucial. The success of dismantling Chivo and Fidebitcoin will determine whether El Salvador can rebuild trust or face continued skepticism regarding its future Bitcoin pronouncements.