The International Monetary Fund (IMF) has urged El Salvador to stop accumulating Bitcoin through both purchases and mining, according to a new Staff Country Report. The recommendation is part of the conditions tied to the country’s $1.4 billion loan agreement, Forbes reported.

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El Salvador Faces IMF Bitcoin Restrictions

El Salvador adopted Bitcoin as legal tender in 2021, drawing global attention. However, the IMF has consistently expressed concerns about the policy. The latest report calls for the country to liquidate the fund created to purchase Bitcoin. The IMF also wants the public sector to halt all involvement with the cryptocurrency.

The report acknowledges El Salvador’s progress in certain areas, including improved security and a rise in tourism. However, the IMF highlights ongoing macroeconomic imbalances, fiscal deficits, and substantial debt. The loan agreement could unlock up to $3.5 billion in additional financing from organizations like the World Bank and the Inter-American Development Bank.

Bukele Agrees to IMF Bitcoin Terms

President Nayib Bukele has shifted his stance on the IMF. He initially dismissed the fund's concerns but later made changes to the Bitcoin Law and agreed to cease public Bitcoin involvement. The report states that Bukele's administration aims to address structural economic challenges under the IMF-supported program.

El Salvador must fully comply with the IMF’s recommendations by December 2025. The country is required to disclose all Bitcoin holdings by the end of March, listing assets managed by public entities such as Chivo, the Bitcoin Management Agency, and the Lempa River Hydroelectric Power Plant. A second review of this process is scheduled for June.

Source: Finance Magnates