Is El Salvador Faking Its Bitcoin Growth? IMF Footnote Sparks New Doubts

A new report from the International Monetary Fund (IMF) suggests that El Salvador's recent increase in Bitcoin BTC/USD reserves stems from internal asset consolidation, not new purchases, as previously claimed by government officials.

In a staff report dated July 15, the IMF clarified that the observed rise in Bitcoin holdings within the country’s Strategic Bitcoin Reserve Fund was the result of streamlining state-owned wallets.

This contrasts with public messaging from El Salvador's National Bitcoin Office, which has frequently touted daily Bitcoin purchases by the government under President Nayib Bukele.

The report also reiterates the IMF’s long-standing position that El Salvador should limit exposure to the volatile asset, particularly as it remains in talks over a $1.4 billion funding agreement.

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"The overall stock of Bitcoin held by the public sector has remained unchanged since program approval," the IMF said, urging authorities to "continue to keep the public sector's holdings of Bitcoin unchanged."

According to on-chain analytics, the Central American country currently holds over 6,200 BTC, valued at more than $738 million, ranking it among the largest sovereign holders of Bitcoin globally.

In addition to addressing asset management, the IMF report noted that El Salvador has taken steps to enhance oversight and reduce financial risk associated with its crypto initiatives.

The government has committed to publishing quarterly reports for entities like Chivo, LaGeo, and Fidebitcoin, and is expected to incorporate all crypto activity into official macroeconomic data.

The report also detailed plans to privatize the Chivo wallet, the state-backed crypto payments app.

A business plan has reportedly been published and discussions with potential buyers are ongoing, with a sale targeted for completion by July 2025.

In its advisory role, the IMF is assisting El Salvador in crafting a comprehensive regulatory framework for digital assets.

This includes guidelines for asset custody, AML/CFT compliance, and the role of the new Bitcoin Management Agency, known as AAB.

What’s Next: The crypto market continues to monitor El Salvador's Bitcoin trajectory closely. Recent community estimates placed the country's Bitcoin portfolio near an all-time high of $760 million, with 30 BTC reportedly added in the last month.

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