IMF Approves El Salvador Program That Narrows the State’s Bitcoin Role
The IMF approved a 40-month, roughly $1.4 billion Extended Fund Facility for El Salvador whose commitments included voluntary private-sector Bitcoin acceptance, U.S.-dollar tax payments, limits on public-sector Bitcoin activity and purchases, and a gradual withdrawal from the Chivo wallet.
On February 26, the International Monetary Fund’s Executive Board approved a 40-month Extended Fund Facility for El Salvador worth roughly $1.4 billion. The financing package covered fiscal, financial, governance, and anti-corruption reforms, but it also embedded a significant retreat from the state-led Bitcoin model El Salvador had launched in 2021.
Some of the legal groundwork had already occurred in January. El Salvador amended its Bitcoin Law so that private businesses were no longer compelled to accept BTC, and tax obligations were to be paid in U.S. dollars. The February historical event was not that earlier statutory amendment. It was the IMF Board’s approval of a program that incorporated those changes and added commitments to confine public-sector involvement in Bitcoin-related economic activity, transactions, and purchases while gradually unwinding government participation in the Chivo wallet.
The decision did not ban Bitcoin in El Salvador or eliminate private ownership and voluntary use. Nor did it erase the country’s earlier role as the first nation to make Bitcoin legal tender. Instead, it materially changed the institutional meaning of that experiment: the government moved from mandatory acceptance and direct public infrastructure toward a more limited and voluntary model as part of an internationally financed economic program.
For Bitcoin history, this was a milestone because it marked the clearest formal retrenchment of the world’s first national Bitcoin legal-tender regime.