IMF approves $139 million payout to El Salvador after Bitcoin condition waiver
The International Monetary Fund approved a $139 million payout to El Salvador on October 1, 2026, after waiving a breach related to the country’s Bitcoin accumulation limits. The decision allows El Salvador to continue operating under its IMF program while maintaining restrictions on the use of public resources for Bitcoin purchases.
The original IMF arrangement imposed a continuous restriction on voluntary Bitcoin accumulation by El Salvador’s public sector. Program documents defined voluntary accumulation to include purchases and mining, while excluding Bitcoin obtained through seizures, forfeitures and similar law-enforcement actions.
By September, the IMF and Salvadoran authorities had reached an agreement concerning Bitcoin that had appeared in government-controlled wallets since the program’s first review. Documentation provided by El Salvador showed that the Bitcoin had come from private donations and that no public resources had been used. The IMF accepted the explanation, although the identities of donors and the amounts of individual donations were not disclosed.
The finding addressed questions raised by wallet movements that appeared to show El Salvador continuing to add Bitcoin after agreeing to limit state accumulation. The October 1 board decision does not authorize a return to government-funded purchases. The IMF said “no further Bitcoin accumulation is expected beyond documented donations,” establishing the expectation that any future additions must remain within the documented donation framework.
El Salvador must further reduce its role in Chivo
Bitcoin accumulation is only one part of the IMF’s conditions for El Salvador. The program also requires the government to reduce its direct involvement in Chivo, the digital wallet introduced during the country’s Bitcoin rollout.
In September, the IMF confirmed that majority ownership and operational control of Chivo had been transferred to a private operator. El Salvador retained a minority stake and custodial responsibilities for customer assets at that stage. The IMF Executive Board now wants the remaining public-sector exposure removed.
Dan Katz, the IMF’s First Deputy Managing Director and chair of the board discussion, said the residual public-sector involvement “should be fully unwound.” Negotiations over Chivo continued into 2026, and although majority ownership and operational control had been transferred by September, the latest IMF statement indicates that the government had not yet eliminated its remaining exposure.
El Salvador also amended its Bitcoin Law in 2025. The changes ended mandatory Bitcoin acceptance for private businesses and required taxes to be paid in U.S. dollars. Those amendments formed part of the policy measures supporting the IMF program.
IMF raises El Salvador growth forecast to 4.5%
The payout was approved as the IMF reported stronger economic activity than previously expected. The Fund projects El Salvador’s real gross domestic product to expand by 4.5% in 2026, following estimated growth of 3.9% in 2025. Growth is forecast at 4% in 2027.
IMF staff attributed the improved outlook to investment and private consumption, as well as remittances, tourism and capital inflows. The Fund also cited improved security and stronger investor confidence as factors supporting economic activity.
According to the board review, El Salvador comfortably met its reserve and liquidity targets. Gross international reserves are projected to reach $5.35 billion in 2026 and $6.17 billion in 2027. The primary fiscal balance is expected to record a surplus equivalent to 2.9% of GDP this year and 3.7% next year.
Despite the stronger outlook, the IMF said El Salvador must continue implementing fiscal reforms. Pension and civil-service measures had been delayed, while the Fund called for tighter expenditure controls, improved revenue administration and stronger public financial management.
Next steps for El Salvador’s Bitcoin policy
Bitcoin holdings will remain subject to increased disclosure requirements under the IMF program. Salvadoran authorities are expected to improve reporting on crypto assets controlled by public bodies and keep information on government-controlled wallets up to date.
The IMF wants El Salvador to prevent public Bitcoin exposure from expanding beyond verified donations. Under the September agreement, authorities provided documentation for accumulated coins and committed to making no new additions outside those documented transfers.
El Salvador’s public Bitcoin strategy has generated uncertainty because government-linked channels continued to display growing holdings while IMF documents stated that no public resources were being used. The latest agreement is intended to clarify how those holdings are recorded and what forms of accumulation remain permitted under the program.
The next stage also includes stronger rules for digital-asset companies, public crypto holdings and financial-sector oversight. Dan Katz said El Salvador should improve disclosure of state crypto assets and strengthen the regulatory, supervisory and governance framework for crypto service providers.
The IMF specifically called for amendments to El Salvador’s Digital Asset Issuance Law. The government is also expected to complete the process of ending its remaining public-sector exposure to Chivo while continuing to comply with the program’s fiscal and transparency requirements.
Why This Matters
The IMF waiver distinguishes between Bitcoin acquired with public funds and Bitcoin received through documented private donations. It allows El Salvador to remain within its IMF program without authorizing a broader state purchasing strategy, while placing greater emphasis on wallet transparency and public-asset reporting.
The decision also shows that El Salvador’s Bitcoin policy remains linked to wider economic reforms. The country must continue reducing government involvement in Chivo, improving crypto-sector regulation and implementing fiscal measures even as the IMF raises its growth forecast and releases additional financing.
Frequently Asked Questions
Why did the IMF waive El Salvador’s Bitcoin breach?
The IMF accepted documentation showing that the Bitcoin in question came from private donations and that no public resources were used. The donors and individual donation amounts were not disclosed.
Does the waiver allow El Salvador to buy more Bitcoin with government funds?
No. The October 1 decision does not authorize government-funded Bitcoin purchases. The IMF said “no further Bitcoin accumulation is expected beyond documented donations,” so future additions must remain within the documented donation framework.
What must El Salvador do next?
El Salvador must continue reducing its remaining public-sector involvement in Chivo, improve disclosure of public crypto assets, strengthen regulation of crypto service providers and amend its Digital Asset Issuance Law. It must also continue its fiscal reforms and improve public financial management.