Bitcoin, IMF lends billions to El Salvador but places limits on the digital token

You want to borrow my money? Then you must submit - in whole or in part - to my conditions. That's one way to comment on the news that El Salvador - state-level forerunner of the bitcoin - will dismantle its Chivo Wallet by the end of July.

But let us go in order. Recently, the Central American state concluded a billion-dollar deal with the International Monetary Fund. An agreement aimed at strengthening public finances and addressing the country's macroeconomic imbalances. It is clear that the IMF, among other counterparts, wanted precisely the dismantling of public sector participation in the Chivo portfolio by the end of July.

The latter had debuted on the market in September 2021 as a tool to promote the adoption of bitcoin. Last March, as part of the transparency agreements signed with the IMF itself, the government had published the wallet's financial statements, which had confirmed its loss-making operation. On closer inspection, however, with the current jump in the cryptocurrency's share price, the balance sheet must have improved considerably.

Nevertheless, the IMF loan is conditional on El Salvador's exit from the digital portfolio. Lthe organisation generally reported that it had concluded the first review of the Extended Facility, approved last February, which includes fiscal commitments.

For the IMF, the programme has had a "solid performance" and, based on these results, agreements have been reached with the government on "policies to continue to ensure the targets are met". The report states that 'efforts will continue to ensure that the total amount of bitcoin held in all government-owned portfolios remains unchanged, in line with programme commitments',.