El Salvador’s Bitcoin Wallet Trips Up IMF Deal Compliance
The International Monetary Fund (IMF) just dropped its latest review of El Salvador’s $1.4 billion credit deal, and there’s a hiccup. Turns out, the country’s official bitcoin wallet, Chivo, has been quietly causing problems with the agreement’s rules on not hoarding too much bitcoin.
It’s a bit ironic, really. The whole point of the deal was to keep El Salvador’s bitcoin holdings in check—a condition the government agreed to back in February. But Chivo’s design seems to have thrown a wrench in that plan. When users sell bitcoin through the wallet, the system doesn’t automatically offload the actual cryptocurrency. Instead, it piles up in the government’s coffers.
How Chivo Broke the Rules—Without Meaning To
The IMF’s report puts it bluntly: “Fluctuations in Chivo clients’ deposits denominated in bitcoin and Chivo’s liquidity management policy… led to minor breaches in conditionality.” Translation? The wallet’s setup made it too easy for the public sector to accidentally stockpile more bitcoin than allowed.
To keep tabs on this, the IMF says it’s tracking all of Chivo’s hot and cold wallet addresses, checking balances daily. It’s not a small operation—every transaction gets scrutinized. And while the breaches were small, they were enough to raise eyebrows.
The good news? El Salvador’s government is already moving to fix things. They’ve promised to sell off or unwind Chivo Wallet this month, along with liquidating Fidebitcoin, a state-run fund that helped with BTC-USD exchanges. The IMF seems satisfied with the plan, noting that “corrective actions” are in place to prevent future slip-ups.
The Elephant in the Room: Bukele’s Bitcoin Buys
Here’s where it gets awkward. The IMF’s report doesn’t even mention President Nayib Bukele’s very public bitcoin shopping spree. While Chivo’s accumulation was accidental, the government has been deliberately buying bitcoin for years—over 6,239 BTC at last count, worth around $740 million today.
You’d think that would clash with the “no excessive bitcoin” rule, but somehow, it hasn’t. The IMF’s silence on the matter is… interesting. Maybe it’s a loophole, or maybe the fund is choosing its battles. Either way, El Salvador keeps stacking sats, and the IMF keeps signing off on reviews.
For now, the focus is on Chivo. The wallet’s days appear numbered, and the government seems eager to stay in the IMF’s good graces. But with Bukele’s bitcoin bets still rolling, it’s hard to say how long this balancing act will last.
