Cooperation while confronting: Why does the IMF "tolerate" El Salvador's continued increase the position in Bitcoin?

The International Monetary Fund (IMF) unexpectedly “praised” El Salvador's economic development recently, despite the Central American country continuing to defy the IMF's earlier advice by continuously increasing its Bitcoin holdings. The IMF's report predicts that El Salvador's real GDP will grow by about 4% in 2025, with a “very good” outlook, and for the first time does not mention the old tune of “pausing the Bitcoin strategy.” Meanwhile, the Bitcoin reserves in El Salvador's treasury have increased to nearly 7,500 coins, worth about $660 million, and the country added more than 1,000 coins in a single month during the market's big dump in November. The subtle softening of the IMF's stance, combined with the Salvadoran government's push to negotiate the sale of the state-owned Wallet Chivo, marks a “real compromise” in the ongoing experiment of sovereign digital currency.

IMF's Praise: Economic Growth as the Best Defense for Bitcoin Strategy

The statement released by the International Monetary Fund on Monday cast a “vote of confidence” for El Salvador's controversial macroeconomic experiment. What is most notably different from previous statements is that it does not repeat the previous advice for El Salvador to suspend the accumulation of Bitcoin. Instead, the IMF highly praised the country's “better-than-expected economic growth,” attributing it to improved confidence, record remittances, and active investment. The IMF expects El Salvador's real GDP growth rate to reach around 4% in 2025 and provided a “very good” assessment for 2026's outlook.

This shift in attitude is not unfounded. In March this year, El Salvador reached a loan agreement for a $3.5 billion extended fund arrangement with the IMF. As a traditional international financial institution, the IMF's core concerns have always been the macroeconomic stability, debt sustainability, and soundness of the financial system of its member countries. The initial agreement did indeed contain clauses limiting public spending related to Bitcoin. However, when El Salvador responded with real economic growth data of 4%, the IMF's negotiating leverage and moral stance had to adjust. The strong growth figures became the most powerful and irrefutable argument for President Nayib Bukele's government to defend its “Bitcoin strategy.”

A deeper observation reveals that the IMF's focus has shifted from the principled question of “whether to hold Bitcoin” to more operational issues of risk management and transparency. The statement mentioned: “Discussions about Bitcoin projects are still ongoing, focusing on enhancing transparency, safeguarding public resources, and mitigating risks.” This indicates that the IMF has chosen a more pragmatic stance in the face of reality: since it cannot be stopped, efforts are being made to ensure that this national-level experiment is conducted in a more regulated and controllable manner. This shift in strategy from “blocking” to “guiding” is a typical adaptive adjustment by international financial organizations when facing innovation and sovereign choices.

El Salvador's Persistence: Accumulating in a Bear Market and the Evolution of National Strategy

In the face of the IMF's earlier “suggestions” and even potential pressures, El Salvador has demonstrated remarkable strategic determination. President Nayib Bukele made it clear as early as March that he “will not stop” buying Bitcoin. The government's actions have further strongly evidenced this point. According to data from El Salvador's Bitcoin office, as of December 23, the total amount of Bitcoin held by the country's treasury has reached 7,509 coins, with a total value of approximately $659 million at current prices.

More significantly, its operations in November 2025 stand out. When the global cryptocurrency market underwent a deep adjustment and the price of Bitcoin saw a big dump, El Salvador not only did not retreat but decisively increased its holdings by over 1,000 Bitcoins. This centralized purchase, worth approximately 100 million dollars, clearly conveyed two signals: first, El Salvador's long-term belief in Bitcoin has not wavered due to market fluctuations; second, its investment strategy is evolving from simple regular accumulation to a more proactive “buying on dips,” indicating an improvement in the maturity of its financial operations team.

Key data and recent operations of El Salvador's Bitcoin treasury

• Total Holdings: 7,509 BTC (approximately 659 million USD)
• Recent Key Operations: During the market depth adjustment in November 2025, a single month increase of over 1,000 BTC
• Strategy Evolution: Shift from “daily fixed investment” to strategically timing “buying large amounts on dips”
• Core Controversy: This move contradicts the spirit of the “restriction on public sector involvement in Bitcoin” clause in the IMF's earlier loan agreement, but the economic growth performance has weakened the IMF's critical stance.

This national-level “investment experiment” has been ongoing for several years, with costs distributed widely, involving everything from the peak of the bull market in 2021 to the low of the bear market in 2025. Although the market often judges this strategy based on the short-term fluctuations of its holdings, the Salvadoran government seems to place greater importance on its long-term strategic significance: to diversify national reserve assets by incorporating Bitcoin, attract global crypto capital and talent, and reshape the country’s financial identity in the digital age. From this perspective, every increase in holdings during market downturns reinforces its national narrative.

Focus of Negotiation: Sale of Chivo Wallet and “Risk Isolation”

In the complex relationship of “cooperation while confronting” between the IMF and El Salvador, the disposal issue of state-owned Bitcoin Wallet Chivo has become a core focus of negotiation. The IMF specifically pointed out in a statement that negotiations regarding the sale of the Chivo Wallet “have entered an in-depth stage.” This wallet, launched during the early phase of Bitcoin's fiat integration, was a core tool promoted by the government for widespread adoption, but has also been controversial due to operational costs, technical issues, and potential financial risks.

From the perspective of the IMF, promoting the El Salvador government's sale of the Chivo Wallet is a crucial “risk isolation” measure. The logic is that as long as the government directly operates a retail payment system for the entire population, it will inevitably continue to bear huge operating expenses, technical maintenance responsibilities, and potential financial stability risks. By divesting these market-oriented businesses to the private sector, the relevant risks can be effectively removed from the government's balance sheet, allowing the government's role to return to that of a “regulator” and “asset holder,” rather than a “retail service provider.” This is consistent with the IMF's consistent advocacy for reducing direct government intervention in the market and enhancing efficiency.

For the Salvadoran government, selling Chivo could be a shrewd financial and political move. On one hand, it can divest a budget-consuming asset in exchange for cash income and potentially bring in more professional operators to improve services. On the other hand, it can be framed as a positive response to IMF concerns, helping to ease bilateral relations and clear obstacles for subsequent loan disbursements, while not harming its core national strategy of accumulating Bitcoin. Making a concession by “selling a wallet application” in exchange for the international community's tacit approval of its fundamental strategy of “holding Bitcoin assets” is a politically astute trade.

Global Demonstration Effect: Where Will a Sovereign Country's “Crypto Experiment” Lead?

The years-long game between El Salvador and the IMF, along with recent signs of easing, has long surpassed the bilateral relations between the two countries and has become a global benchmark case for observing how sovereign nations adopt cryptocurrencies. Every step of its progress is closely watched by other developing economies that are still on the sidelines.

First, it provides a realistic roadmap reference for other countries considering incorporating crypto assets into their reserves or fiat systems. El Salvador's experience shows that conflicts with international financial institutions are not irreconcilable; the key lies in whether solid macroeconomic performance (such as growth, remittances, and investment) can be used to win dialogue space. Economic growth is the strongest support for addressing external doubts.

Secondly, this experiment is reshaping the discussion about “national financial sovereignty”. Under the dollar-dominated international financial system, a small country is attempting to explore an independent path of fiscal and monetary policy by actively allocating a decentralized global asset. Regardless of the ultimate success or failure, its courage and exploration are historically significant in themselves. The softening of the IMF's attitude is, to some extent, a kind of “acceptance” or “coexistence” attempt by the traditional system in response to such emerging challenges.

Looking ahead, El Salvador's path remains fraught with challenges. The severe fluctuations in Bitcoin prices will continue to test its fiscal resilience and public patience; how to ensure inclusive finance after the sale of the Chivo Wallet; and how to truly convert Bitcoin reserves into capital that promotes the development of the real economy are all unresolved issues. However, the latest developments indicate that this grand experiment has passed the most dangerous stage of “isolation and confrontation” and is entering a more complex new stage of “adaptation and institutionalization.”

For the global cryptocurrency industry, the story of El Salvador is a powerful narrative: it proves that cryptocurrency can no longer be merely a tool for speculation or a toy for tech geeks, but can be integrated into a country's development strategy and compel the traditional international financial order to engage with it. Perhaps this is the most profound legacy that the “Bitcoin Country” leaves to the world.