Did El Salvador Fake Its Bitcoin Purchases to Secure an IMF Loan?

In 2021, El Salvador made history by becoming the first country to adopt Bitcoin as legal tender. President Nayib Bukele described the move as a path to financial freedom from the U.S. dollar, cheaper remittances, and a tech-driven revolution. The government launched the Chivo wallet, built a network of Bitcoin ATMs, and promised a futuristic tax-free “Bitcoin City.” Even more boldly, Bukele pledged to buy one Bitcoin per day starting in November 2022. Every week, the government proudly shared updates on new Bitcoin purchases, referencing sites like Nayib Tracker. In the crypto world, El Salvador was hailed as a fearless pioneer challenging traditional finance. But behind the scenes, the country was facing a deep financial crisis. Debt was rising, the budget deficit was widening, and trust from international investors was fading. By 2024, El Salvador quietly negotiated a $1.4 billion loan with the International Monetary Fund (IMF), agreeing to tough reforms in exchange for much-needed funding.

Publicly Pro-Bitcoin, Privately Pulling Back As it turns out, El Salvador stopped purchasing Bitcoin as early as February 2025—just weeks after finalizing its deal with the IMF. The government informed the IMF but kept the public in the dark. President Bukele and his institutions continued posting on social media as if daily Bitcoin buys were ongoing. A July 2025 IMF report revealed the truth: no new Bitcoin purchases had occurred for months. A footnote disclosed that the increase in El Salvador’s Bitcoin reserves was merely due to internal wallet transfers—no new acquisitions, no market gains. The government had seemingly adopted a dual strategy: meet IMF demands in private while publicly maintaining the illusion of unwavering Bitcoin support. It was a calculated move to secure funding without damaging its global crypto image.

Balancing Credibility and Image By late 2024, El Salvador was under pressure. Although its Bitcoin experiment brought tourism and global media attention, the economic reality was stark—Chivo didn’t work, debts mounted, infrastructure lagged. In December 2024, the government agreed to: 🔹 Stop buying additional Bitcoin

🔹 Make Bitcoin usage optional rather than mandatory

🔹 Limit government control over the Chivo wallet

🔹 Increase transparency around public crypto activity But these conditions were never made public. President Bukele continued to present El Salvador as a fearless crypto nation, while in reality the country was quietly complying with IMF demands. On top of the $1.4 billion IMF loan, El Salvador also secured over $2 billion from the World Bank and IDB.

Clever Strategy or Deliberate Deception? It doesn’t seem that the government set out to deceive maliciously. El Salvador needed time, money, and stability. By keeping up the illusion of ongoing Bitcoin support, it maintained public confidence while meeting global creditors’ terms. This balancing act worked—for a time. But when the IMF disclosed the true picture in July 2025, the illusion started to crumble. Bitcoin didn’t fail. What failed was transparency and trust. El Salvador had become a symbol of crypto courage, but it quietly backpedaled once real economic pressure set in.

A Cautionary Tale El Salvador never officially announced it had stopped buying Bitcoin—but behind the scenes, its pro-BTC narrative slowly faded. The dual-track strategy worked until the IMF made it clear: no Bitcoin purchases since February. This revelation showed just how fragile the Bitcoin experiment was when tested by hard fiscal reality. El Salvador’s experience is a warning to other emerging nations—in Africa, Southeast Asia, and Latin America—considering similar crypto moves. The country tried to set a bold example, but when faced with debt, weak systems, and international demands, that vision faded into quiet retreat. The technology wasn’t the problem—Bitcoin still functions. But without transparency, clear rules, and reliable infrastructure, even the most daring national crypto policy isn’t built to last. The bigger question now is:

Can Bitcoin really work as national policy, or is it too volatile and risky for governments to depend on? In El Salvador’s case, the answer is becoming clear. Bitcoin brought attention, popularity, and a progressive image—but when that image shattered, the country was left deep in debt, reliant on foreign loans, and responsible for cleaning up a mess of its own making.

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