IMF Confirms El Salvador Bitcoin Growth Funded by Donations, Unlocks $140M

The International Monetary Fund says the recent rise in El Salvador Bitcoin growth has nothing to do with government spending. In a staff-level agreement covering the combined second and third reviews of the country’s lending program, the Fund confirmed that every coin added to the state’s Bitcoin holdings since its last checkup came from private donations, not public money. The finding lands alongside a broader deal that could unlock roughly $140 million for the Central American nation, and it reshapes how outside observers should read El Salvador’s much-debated relationship with crypto.

Key takeaways

• The IMF confirmed that El Salvador’s Bitcoin reserve growth since its first program review came entirely from private donations, with no public funds involved.
• Approval of the combined second and third reviews by the IMF Executive Board would release about $140 million under the country’s Extended Fund Facility.
• El Salvador entered the 40-month EFF program in February 2025 with total access of roughly $1.4 billion, equal to 360% of its IMF quota.
• Majority ownership and daily control of the Chivo e-wallet has shifted to a private operator, with the state keeping only a minor stake.
• The IMF projects 4.5% real GDP growth for El Salvador in 2026, with the public sector’s primary surplus widening from 2.9% of GDP to 3.7% by 2027.

IMF Verifies Private Donations Behind El Salvador’s Bitcoin Growth

The IMF has now traced every new coin in El Salvador’s Bitcoin stockpile back to private givers rather than state coffers, closing a question that had shadowed the country’s lending program for months. That distinction matters because it separates fiscal discipline from crypto speculation — a line the Fund has watched closely since talks began.

No Public Funds Used in Bitcoin Accumulation

At the first review, completed on June 27, 2025, the Fund had already noted that public-sector Bitcoin holdings hadn’t grown since the program started. Coins showing up in the Strategic Bitcoin Reserve Fund back then had simply been consolidated from other state-held wallets, not newly purchased. This time, the IMF went a step further and verified where the additional coins actually came from.

“Documentation has been provided verifying that Bitcoin accumulation since the first review reflects private donations and that no public resources were used,” the Fund’s statement read. The IMF added that it does not expect further accumulation beyond what has already been documented, effectively drawing a line under the debate over whether the government is quietly buying more Bitcoin behind the scenes.

Bitcoin Price Swings and Reserve Value

Bitcoin’s rollercoaster has followed El Salvador’s IMF program from the start. Earlier this year, a slide in prices dragged down the value of the country’s holdings and coincided with the nation’s credit default swaps climbing to a five-month high. That episode underscored how exposed El Salvador’s balance sheet optics remain to crypto market swings, even if the underlying accumulation itself is no longer funded by taxpayers.

Why this matters: the IMF’s verification effectively separates two risks that had been blurred together — the fiscal risk of a government spending public money on a volatile asset, and the market risk of holding an asset whose value can swing sharply regardless of who paid for it. Confirming the donation-only source removes the first risk from the equation, even though the second one persists.

A $1.4 Billion Program With $140 Million on the Line

El Salvador’s financial lifeline from the IMF is a 40-month Extended Fund Facility that began in February 2025, carrying total access of about $1.4 billion — equivalent to 360% of the country’s quota at the Fund. That’s a substantial commitment, and it comes with strings attached, including the kind of transparency the Fund just extracted on Bitcoin sourcing.

The newly reached staff-level agreement bundles the second and third program reviews together. If the IMF’s Executive Board signs off, El Salvador would receive around $140 million in fresh disbursement. Clearing two reviews at once is itself a signal: it suggests the country’s reform agenda has stayed largely on schedule rather than stalling out, which tends to matter to other creditors and investors watching from the sidelines.

New Rules for Digital Assets and Chivo’s Private Handover

El Salvador and the IMF have also agreed on a plan to overhaul how the country regulates crypto going forward, pairing tighter oversight with a retreat of the state from day-to-day involvement in digital wallets. Together, these moves point toward a government trying to keep Bitcoin’s legal-tender status while distancing public finances from its risks.

Modernizing the Regulatory Framework

Both sides settled on plans to modernize the legal, regulatory, and supervisory framework governing digital assets in El Salvador. Part of that push involves tightening oversight and risk controls specifically over the crypto holdings the public sector keeps on its books — a response, in part, to the scrutiny that Bitcoin’s opaque accumulation history has drawn from international lenders.

Chivo E-wallet Ownership Shift

Public involvement in the Chivo e-wallet, once the government’s flagship tool for pushing Bitcoin adoption, has been substantially unwound. A private operator has taken over majority ownership and daily management, while the state holds onto only a small stake and keeps responsibility for safeguarding customer assets. Work is also underway to make Bitcoin balances held across the wallet’s various addresses more transparent to outside observers.

This shift in Chivo e-wallet ownership mirrors the broader theme of the IMF deal: pulling public money and public liability out of Bitcoin operations while leaving the door open for private actors to keep the crypto experiment running. It’s a pragmatic compromise that lets El Salvador preserve its Bitcoin branding without exposing the treasury to the same degree of risk it once carried.

Economic Outlook: Growth Projections and Fiscal Surplus

Beyond Bitcoin, the IMF’s review paints a picture of an economy performing better than expected. Mr. Torres, the Fund’s helped the Mission Chief for El Salvador project a real GDP growth of 4.5% in 2026, along by investment, consumption, remittances, and a tourism sector that keeps gaining ground. That builds on a 2025 growth rate of 3.9%, which had already beaten earlier forecasts.

El Salvador’s own Central Reserve Bank has grown more optimistic too, raising its 2026 growth forecast range to between 4.5% and 5%, up from an earlier estimate of 3% to 3.5%, citing strong economic activity in the first half of the year. Improved security conditions and a crackdown on gang violence have also made foreign investors more comfortable deploying capital in the country, while construction activity has picked up alongside tourism.

On the fiscal side, the non-financial public sector’s primary surplus is expected to widen from 2.9% of GDP this year to 3.7% in 2027. That trajectory, paired with the confirmed digital assets regulation El Salvador has now agreed to implement, gives the IMF a stronger basis for arguing that the reform program is delivering results in public service efficiency and poverty reduction — even as Bitcoin remains a variable the Fund will keep monitoring closely.

Whether El Salvador’s Bitcoin strategy holds up as a template for other nations juggling IMF conditions and crypto ambitions is still an open question. What’s clear for now is that the Fund has drawn a firmer line between private crypto donations and public fiscal risk — and that line will likely define how the next disbursement decisions get made.

FAQ

What has driven the growth of El Salvador’s Bitcoin reserves?

The IMF confirmed that the growth in El Salvador’s Bitcoin reserves since the first review is due exclusively to private donations, with no public funds used.

What is the status of El Salvador’s IMF Extended Fund Facility program?

El Salvador entered a 40-month Extended Fund Facility in February 2025 with access to approximately $1.4 billion, and approval of combined second and third program reviews would release about $140 million.

How is El Salvador regulating digital assets and managing the Chivo e-wallet?

Plans are agreed to modernize the legal, regulatory, and supervisory framework for digital assets, with majority ownership and control of the Chivo e-wallet transferred to a private operator while the state retains a minor stake.

What are the IMF’s economic projections for El Salvador?

The IMF projects El Salvador’s real GDP will grow by 4.5% in 2026, with the non-financial public sector primary surplus increasing from 2.9% of GDP in 2026 to 3.7% in 2027.

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Article produced with the assistance of artificial intelligence and reviewed by the editorial team.