IMF says El Salvador did not use public funds to buy Bitcoin

El Salvador provided documents to the International Monetary Fund confirming that the increase in Bitcoin increased due to private donations

According to the preliminary staff-level agreement announcement issued by the International Monetary Fund (IMF), El Salvador has provided relevant documents proving that the Bitcoin it has accumulated since June 27, 2025 did not come from public funds, but from private donations. The announcement clearly stated that the verified increase in Bitcoin did not use any public resources.

Once it is approved by the Executive Board and completed relevant preliminary actions, El Salvador is expected to receive approximately US$140 million in aid funding. Currently, the main ownership and operation rights of the e-wallet called "Chivo" have been transferred to the private sector, with the government retaining only a minority stake and custody responsibility for customer assets. The International Monetary Fund said it does not expect El Salvador to increase its holdings in Bitcoin beyond recorded private donations.

The disclosure appeared in the September 3 announcement of the International Monetary Fund announcing a staff-level agreement covering the second and third joint reviews of the country's Extended Financing Facility (EFF). The IMF said it had reached an agreement with Salvadoran authorities that no further Bitcoin accumulation was expected beyond recorded donations. However, the announcement did not disclose the identity of the donor or the specific amount of bitcoins received privately.

Clarify misunderstandings caused by blockchain data

The latest disclosures help explain the apparent increase in wallet address balances associated with El Salvador's "strategic bitcoin reserves." Previously, these increases have raised doubts that El Salvador continues to buy bitcoins while fulfilling its commitments to the International Monetary Fund.

The International Monetary Fund pointed out that documents provided by Salvadoran authorities confirmed that accumulations recorded after the first EFA review reflected private donations and that no public funds funded these increases. This distinction is crucial because although blockchain records can show assets entering wallets, they cannot automatically identify whether the source of funds is purchase, internal transfer, or donation. Previous analysis pointed out that the flow of funds in government wallets may create a misleading impression that sovereign countries continue to buy Bitcoin.

As early as July 2025, an International Monetary Fund document showed that the total amount of Bitcoin in government-controlled wallets remained unchanged, with some of the reported increases reflecting Bitcoin integration operations between different nationally controlled addresses. The new document further clarifies that the source of accumulation recorded after June 27, 2025 is private donations.

The next US$140 million is expected to be released

An agreement was reached between IMF staff and Salvadoran authorities after completing the second and third joint reviews of the Extended Financing Arrangements. The arrangement still requires approval by the Executive Board of the International Monetary Fund and completion of agreed pre-actions. If these requirements are met, El Salvador will receive approximately US$140 million (equivalent to 101.96 million yuan in special drawing rights) in financial support.

The International Monetary Fund approved a 40-month expanded financing arrangement in February 2025, with a total available line of approximately US$1.4 billion. As of now, the country has received 172.32 million special drawing rights under the plan. Because the executive board has not yet approved the review results or authorized additional allocations, the International Monetary Fund described the latest agreement as "preliminary" in nature.

The IMF said economic activity in El Salvador exceeded early expectations. Supported by investment, consumption, remittances, tourism and capital inflows, real GDP growth is expected to be 4.5% in 2026. However, this forecast still depends on economic conditions. IMF staff also called for continued fiscal consolidation, strengthened governance, and reduced public debt to below 80% of GDP in 2030.

Chivo Wallet Transfers to Private Control

El Salvador has significantly reduced public participation in the "Chivo" e-wallet, which was launched along with the Bitcoin policy. Primary ownership and operational control have been transferred to an undisclosed private operator. The government retains a minority stake and custody responsibility for client assets. The International Monetary Fund said authorities are working to increase transparency in holding bitcoin across wallets.

The transfer follows long-standing discussions about reducing the government's direct role in encryption services. Under the terms of the original extended financing arrangement, El Salvador made Bitcoin acceptance by the private sector voluntary, stipulated that taxes must be paid in U.S. dollars, and restricted public sector participation in bitcoin-related activities.

No further Bitcoin accumulation is expected

The International Monetary Fund said that both sides have reached an agreement that El Salvador will not accumulate more Bitcoin in addition to recorded private donations. This language describes expectations under staff-level agreements rather than independently enforceable prohibitions declared by the IMF. "Looking forward, no further accumulation of Bitcoin is expected beyond the recorded donations," IMF staff said.

The two sides also agreed to amend El Salvador's digital asset legal, regulatory and supervisory framework. The planned work includes strengthening governance and risk control of cryptocurrency assets held by the public sector. Currently, the executive board must review staff reports. The additional $140 million in funding will not be available until the executive board approves the results of the review and El Salvador completes the required actions.