Key Notes
- Negotiations between the IMF and El Salvador over the Chivo Bitcoin wallet are well advanced.
- Chivo talks are part of the second review of El Salvador’s $40-month IMF financing program.
- IMF says El Salvador has agreed to scale back public Bitcoin activity.
The International Monetary Fund (IMF) said negotiations with El Salvador over the government-run Chivo Bitcoin wallet are well advanced. An active discussion is ongoing regarding a sale or wind-down of the platform, which was released in September 2021. The update came as part of the IMF’s second review of El Salvador’s 40-month Extended Fund Facility (EFF) program. The IMF said talks remain focused on transparency, protection of public funds, and reducing financial risk linked to Bitcoin-related activity.
The IMF added that close engagement with Salvadoran authorities will continue as it works toward a staff-level agreement required to complete the review.
Bitcoin Policy Under Scrutiny
Bitcoin remains a central point of tension between El Salvador and the IMF. The fund has repeatedly warned that Bitcoin price volatility exposes public finances to risk and has pushed for limits on government involvement.
In March, the IMF formally asked El Salvador to halt Bitcoin
BTC
$87 547
24h volatility:
1.7%
Market cap:
$1.75 T
Vol. 24h:
$42.28 B
accumulation through both purchases and mining and to dismantle public structures used to buy BTC. Officials later agreed to scale back public sector participation as part of the financing deal.
According to the IMF, El Salvador has now complied, including initiating a full phase-out of the Chivo wallet. The fund further said:
“Finally, negotiations for the sale of the government e-wallet Chivo are well advanced, and discussions with regards to the Bitcoin project continue, centered on enhancing transparency, safeguarding public resources, and mitigating risks.”
Despite the IMF’s position, El Salvador’s Bitcoin Office continues to publish daily purchase updates. According to data, the country holds an impressive 7,509.37 BTC worth more than $656 million based on current prices, with 1 BTC bought on Dec. 23 as well.
Economy Remains Strong
The IMF said El Salvador’s economy is outperforming expectations, with GDP growth projected near 4% this year and solid momentum heading into next year. Fiscal targets remain on track, reserves are rising, and domestic borrowing has fallen.
Structural reforms have also advanced, including new banking stability laws, the adoption of Basel III standards, and updated anti-money laundering rules.
While economic performance has improved, the IMF made clear that there will be “close engagement with the Salvadoran authorities” in the near future.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
A crypto journalist with over 5 years of experience in the industry, Parth has worked with major media outlets in the crypto and finance world, gathering experience and expertise in the space after surviving bear and bull markets over the years. Parth is also an author of 4 self-published books.
