El Salvador’s president, Nayib Bukele, announced on March 4 that his government would continue to buy bitcoin, and he was surprised despite the International Monetary Fund setting conditions.
Does the IMF protocol prohibit El Salvador from buying more Bitcoins?
salvador purchased another bitcoin for strategic reserves. pic.twitter.com/pywepgk8bl
– Bitcoin Office (@bitcoinofficesv) March 4, 2025
In January, El Salvador signed a $1.4 billion loan agreement with the International Monetary Fund. One of the conditions for this transaction is that the government will stop investing in Bitcoin and no longer classify it as a mandatory fiat currency.
On March 3, the International Monetary Fund released a report confirming that the El Salvador government and state-controlled entities are not allowed to purchase or mine Bitcoin. But just one day later, Bukele went to social media and pointed out that El Salvador would still accumulate more bitcoins.
Did Buckley violate the IMF agreement?
Many believe that Buckley’s actions contradict the conditions of the IMF. However, the vulnerability may allow the purchase of Bitcoin without breaking the transaction:
- The law is not active yet – the new policy removes the fiat currency identity of Bitcoin passed on January 29, but will take effect on April 30.
- Alternative sources of funding – Some experts recommend that governments use state-owned enterprises or pre-approved budgets to make funds purchased by Bitcoin.
- No direct objection – Reuters reported that the IMF reviewed El Salvador’s recent bitcoin transactions and found no violations of the agreement.
Why does El Salvador need an IMF loan?
Despite Buckley’s great support for Bitcoin, the fact remains that his government took the initiative to seek financial assistance from the International Monetary Fund.
Some experts believe that El Salvador was forced to accept the agreement due to worsening financial situation. The country’s public debt has been rising, but many citizens still believe it will either remain stable or decrease.
Source: World Bank
Anonymous financial experts did not see the finances pointed out that El Salvador’s economy is in serious trouble and poverty is rising. As a result, the government has no choice but to comply with the International Monetary Fund’s conditions.
Is Buckley challenging the IMF?
Buckley’s decision raised questions. Is he exploiting legal loopholes or is he testing the IMF’s patience?
Although buying bitcoins is still rare, they can still attract censorship. If Buckle continues, will the IMF tighten restrictions, or will El Salvador keep its Bitcoin strategy alive?
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