Key Points
- El Salvador has purchased 11 more Bitcoin, expanding its reserves despite criticism and IMF’s recommendations.
- The country remains committed to its Bitcoin strategy, reinforcing its position as a pioneer in sovereign crypto adoption.
El Salvador has increased its Bitcoin reserves once again, acquiring 11 more Bitcoin on January 20, 2025.
This latest purchase comes soon after securing a $1.3 billion loan agreement with the International Monetary Fund (IMF), which advised the country to scale back its Bitcoin investments.
Despite criticism from global financial institutions, El Salvador continues to reinforce its Bitcoin strategy, reaffirming its status as a leader in sovereign crypto adoption.
IMF Loan Agreement and Bitcoin Strategy of El Salvador
In December 2024, El Salvador finalized a 40-month Extended Fund Facility (EFF) with the IMF to stabilize its economy and support ongoing fiscal reforms.
This deal provided much-needed financial relief, but it also came with the expectation that the government would limit its Bitcoin exposure and focus on traditional economic measures.
The IMF had previously voiced concerns about El Salvador’s Bitcoin adoption, citing risks related to financial stability, market volatility, and regulatory uncertainty.
Despite these warnings, El Salvador defied expectations by acquiring more Bitcoin just a day after finalizing the IMF agreement.
This move underscores the country’s determination to continue integrating Bitcoin into its financial framework, even in the face of international pressure.
The country made its second Bitcoin acquisition on January 20, increasing its total holdings to $650 million.
El Salvador’s Journey with Bitcoin Since Legalization
El Salvador made history in September 2021 by becoming the first nation to recognize Bitcoin as legal tender, alongside the US dollar.
This move aimed to boost financial inclusion, attract foreign investment, and reduce remittance costs for Salvadorans living abroad.
To facilitate adoption, the government launched the “Chivo Wallet,” offered financial incentives for citizens to use Bitcoin, and installed Bitcoin ATMs nationwide.
However, the country’s Bitcoin experiment has faced challenges, including technical issues with the Chivo Wallet, public skepticism, and price volatility.
The IMF and World Bank have repeatedly urged El Salvador to reconsider its stance, arguing that widespread Bitcoin adoption could pose financial risks.
Despite these challenges, President Nayib Bukele remains committed to Bitcoin, viewing the flagship crypto asset as a hedge against inflation and a tool for economic empowerment.
With El Salvador’s Bitcoin endeavors proving successful, market experts expect countries like Argentina to follow suit.
Many companies in the region, including Bitfarms, Mercado Libre, and Globant, have added Bitcoin to their treasuries.
Bitfarms, the largest Bitcoin mining company in Argentina, has a substantial portfolio of 870 BTC.