IMF Approves $138 Million Disbursement to El Salvador, Grants Waiver for Bitcoin Accumulation Condition

The International Monetary Fund (IMF) has approved a $138 million disbursement to El Salvador, granting a waiver for the country’s failure to meet a condition related to Bitcoin accumulation. The IMF Executive Board completed the second and third reviews of El Salvador’s Extended Fund Facility program on October 1, leading to the approval of the funds.

According to the IMF, El Salvador received a waiver for not meeting a specific condition concerning its Bitcoin accumulation. The IMF cited corrective measures and renewed commitments from Salvadoran authorities as the basis for this waiver. Under the latest program commitments, El Salvador is not expected to accumulate more Bitcoin beyond documented donations.

The IMF also stated that the government is actively working to reduce its role in Bitcoin-related activities. This includes plans to enhance transparency around public-sector crypto holdings and strengthen regulations governing crypto-asset companies. “Efforts will continue to reduce the state’s involvement in Bitcoin-related activities, strengthen crypto‑asset regulation and governance, and enhance transparency regarding public-sector crypto‑asset holdings. No further Bitcoin accumulation is envisaged beyond the documented donations,” the IMF noted.

In line with these commitments, majority ownership and control of El Salvador’s Chivo digital wallet have been transferred to a private operator. The IMF indicated that the remaining public-sector exposure related to Bitcoin should eventually be unwound.

The IMF’s decision comes as El Salvador’s economy has shown better-than-expected performance, attributed to improved security and stronger investor confidence. The country has also made progress in reducing fiscal imbalances, with strengthened reserve and liquidity buffers, and fiscal consolidation broadly staying on track.

Despite these developments, the IMF highlighted that El Salvador still needs to implement further reforms to bolster public finances, rebuild external reserves, and enhance financial-sector resilience. Pension and civil service reforms, which experienced earlier delays, are also expected to move forward.

The IMF emphasized the importance of stronger governance and greater transparency, calling for improvements in areas such as public-sector reporting, beneficial ownership disclosures, asset declarations, and anti-money laundering rules. These reforms are considered crucial for maintaining economic stability.

El Salvador agreed to a 40-month IMF program in February 2025, which provides for total access of approximately $1.4 billion. The IMF’s review and disbursement are part of this ongoing program.

Uncertainties remain regarding the exact timeline for the unwinding of the remaining public-sector exposure in the Chivo digital wallet and the specific details and impact of future pension and civil service reforms.

This IMF disbursement and waiver are significant as they underscore El Salvador’s commitment to reducing its involvement in Bitcoin-related activities and strengthening its regulatory framework. The approval, despite a missed condition, highlights the IMF’s recognition of corrective measures and renewed commitments from the Salvadoran authorities, signaling a path towards greater financial stability contingent on further reforms and enhanced governance.

Why This Matters

The materials describe a narrow update: The IMF Executive Board completed the second and third reviews of El Salvador’s Extended Fund Facility program, approving a $138 million disbursement. The exact timeline for the unwinding of remaining public-sector exposure in the Chivo digital wallet.

Broader Context

Source materials place the factual news in this context: El Salvador’s Extended Fund Facility program.