- Bukele rejects IMF’s Bitcoin restrictions, reaffirming commitment to BTC purchases.
- El Salvador continues acquiring Bitcoin, defying IMF’s loan conditions and demands.
- Market confidence grows as El Salvador’s sovereign bond spreads narrow amid political stability.
El Salvador’s President Nayib Bukele has firmly rejected the International Monetary Fund’s (IMF) request to limit the country’s Bitcoin purchases.
In a post on X, Bukele stated that the government will continue to purchase Bitcoin regardless of the IMF’s restrictions. President Bukele made it clear that El Salvador has no plans to stop its Bitcoin purchases, no matter the IMF’s demands.
IMF Imposes Bitcoin Restrictions on Loan to El Salvador
As part of a $3.5 billion loan agreement, the IMF had set several conditions regarding El Salvador’s Bitcoin strategy.
These included a ban on the public sector voluntarily acquiring Bitcoin. The IMF specified that the Salvadoran government should limit its involvement with Bitcoin-related activities and avoid new acquisitions. Bukele has remained defiant despite these conditions, dismissing the IMF’s demands.
Related: El Salvador Scales Back Bitcoin Adoption Under IMF Loan Terms
Bukele Dismisses Critics, Doubles Down on Bitcoin Strategy
Bukele responded on social media, rejecting earlier predictions that the government would stop buying Bitcoin. He declared that “nothing would halt” their plans. He also reaffirmed his commitment to the Bitcoin strategy, commenting that “work outweighs complaints.”
Shortly after the IMF’s announcement, El Salvador acquired an additional 19 BTC over the past week, followed by one more Bitcoin purchase shortly thereafter.
Stricter Bitcoin Terms in Latest IMF Loan Update
The IMF’s latest updates regarding its loan to El Salvador include more stringent conditions. A legal memorandum released on March 3 specified that El Salvador’s public sector would be prohibited from accumulating Bitcoin voluntarily.
The memorandum also noted restrictions on the public sector’s issuing of Bitcoin-denominated debt or tokenized instruments, stating that this could result in liabilities for the country.
The IMF’s additional request seeks to ensure the Salvadoran government limits its engagement in Bitcoin-related economic activities and transactions. The loan agreement seeks to address any possible risks tied to El Salvador’s Bitcoin effort, aligning the country’s Bitcoin policies with the IMF’s guidelines and global standards for digital asset regulation.
Market Reacts Positively Despite IMF Pressure
Even with the IMF’s strict conditions, El Salvador’s market has shown growth. The country’s sovereign bond spreads, which had been over 700 basis points in late 2023, have now decreased to around 350 basis points. This reflects positive market sentiment.
Related: El Salvador Trades Bitcoin Freedom for $1.4B IMF Lifeline
In February 2024, Bukele secured re-election with strong support, receiving 85% of the vote. The strong political backing, combined with the president’s dominance in the legislative assembly, positions his administration to push forward with reforms, including its Bitcoin strategy, despite external pressures from institutions like the IMF.
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