El Salvador gets $138M after IMF waives Bitcoin rule breach

El Salvador has secured an immediate IMF disbursement of roughly $138 million after the lender completed two reviews of its $1.4 billion program and granted waivers for missed conditions, including one tied to Bitcoin accumulation.

The IMF said its Executive Board completed the second and third reviews under El Salvador’s 40-month Extended Fund Facility on Oct. 1, releasing SDR 101.96 million, worth about $138 million at the Fund’s stated conversion. Bloomberg reported the amount as $139 million.

The board found that several performance criteria had not been met, including the condition covering Bitcoin accumulation. Waivers were granted after what the IMF described as corrective measures and renewed commitments from Salvadoran authorities.

Why did the IMF waive El Salvador’s Bitcoin breach?

El Salvador’s original IMF program placed a continuous restriction on voluntary Bitcoin accumulation by the public sector. Earlier program documents defined voluntary accumulation as purchases or mining, while excluding Bitcoin acquired through seizures, forfeitures and similar law-enforcement actions.

By September, however, the IMF and Salvadoran authorities had reached an agreement over Bitcoin that had appeared in government-controlled wallets since the first review. The Fund said documentation supplied by El Salvador showed the accumulation came from private donations and that no public resources were used.

The finding clarified earlier questions over wallet movements that appeared to show El Salvador continuing to add Bitcoin after agreeing to limit state accumulation. El Salvador’s privately donated Bitcoin noted that the IMF accepted documentation tracing those additions to donations, although donor identities and individual donation amounts were not made public.

The Oct. 1 board decision does not authorize a return to government-funded Bitcoin purchases. The IMF said “no further Bitcoin accumulation is expected beyond documented donations,” making the statement a forward-looking program expectation tied to the current agreement.

Earlier IMF documents had recorded smaller technical breaches of the Bitcoin condition because balances held for Chivo customers could fluctuate, even while public-sector holdings remained unchanged. The latest release does not say those earlier technical issues alone explain the new waiver.

El Salvador must keep cutting the state’s crypto role

Bitcoin is only one part of the IMF’s conditions. The program has required El Salvador to reduce direct government involvement in the Chivo wallet, which was introduced as part of the country’s Bitcoin rollout.

In September, the Fund confirmed that majority ownership and operational control of Chivo had moved to a private operator. The government retained a minority stake and custodial responsibilities for customer assets at that stage.

The Executive Board now wants the remaining state 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.”

El Salvador had already changed its Bitcoin Law in 2025, ending mandatory Bitcoin acceptance for private businesses and requiring taxes to be paid in U.S. dollars. The changes formed part of the measures underpinning the IMF program. Previouscoverage of El Salvador ending mandatory Bitcoin acceptance detailed the legal changes and the planned reduction of government involvement in Chivo.

Negotiations over Chivo continued into 2026. By September, the transfer of majority ownership and operational control had been completed, though the IMF’s latest statement shows the government had not fully eliminated its remaining exposure.

IMF lifts El Salvador growth forecast to 4.5%

The payout was approved as the IMF reported stronger economic activity than it had expected. The Fund projects El Salvador’s real GDP to grow 4.5% in 2026 after an estimated 3.9% expansion in 2025. Growth is forecast at 4% in 2027.

IMF staff attributed the stronger activity to investment and private consumption, alongside remittances, tourism and capital inflows. It cited improved security and investor confidence among the factors supporting activity.

Reserve and liquidity targets were comfortably met, according to the board review. Gross international reserves are projected at $5.35 billion in 2026 and $6.17 billion in 2027. The primary fiscal balance is forecast at a surplus of 2.9% of GDP this year and 3.7% next year.

The Fund still wants El Salvador to continue its fiscal reforms. Pension and civil-service measures had faced delays, while the IMF called for tighter expenditure controls, improved revenue administration and stronger public financial management.

What happens next for El Salvador’s Bitcoin policy?

Bitcoin holdings remain subject to increased disclosure requirements under the IMF program. Authorities are expected to improve reporting for crypto assets controlled by public bodies and maintain updated information on government-controlled wallets.

The Fund wants public Bitcoin exposure kept from expanding beyond verified donations. Its September agreement said authorities had supplied documentation for accumulated coins and committed to no new accumulation outside those documented transfers.

El Salvador’s public-facing Bitcoin strategy had previously created confusion because government-linked channels continued to display growing holdings while IMF documents said no public resources were being used. Earlier coverage of the gap between daily Bitcoin claims and IMF records examined the disagreement between wallet activity and official program accounting.

Under the next stage of the program, the IMF wants stronger rules covering digital-asset companies, public crypto holdings and financial-sector oversight. Katz said authorities should improve disclosure of state crypto assets and strengthen regulatory, supervisory and governance rules for crypto service providers.

The IMF specifically called for amendments to El Salvador’s Digital Asset Issuance Law as part of that regulatory work, while the government is expected to finish unwinding its remaining public-sector exposure to Chivo.