The International Monetary Fund has approved a $139 million disbursement to El Salvador after completing the second and third reviews of its Extended Fund Facility program, while pressing the country to unwind state involvement in Bitcoin-related activities.

In a statement published Friday, the IMF said the disbursement was cleared even though "certain performance criteria were not met, including on the Bitcoin accumulation front, for which waivers were granted based on strong corrective measures and renewed commitments."

The fund added that the Salvadoran state's involvement in Bitcoin-related activities is being unwound and that "no further bitcoin accumulation is envisaged beyond the documented donations."

What did the IMF say about the economy?

The fund's assessment of El Salvador's broader macroeconomic performance was unambiguously positive. "Economic activity has exceeded expectations, supported by sustained improvements in security and investor confidence, as macroeconomic imbalances continue to be addressed," the IMF said.

President Nayib Bukele highlighted that verdict on X, quoting the fund directly: "El Salvador's economy continues to perform strongly." His government has leaned on the improved security environment and rising investor confidence as evidence that its unorthodox policy mix, including the Bitcoin program, has not damaged growth.

Why is Bitcoin accumulation a problem for the fund?

El Salvador made Bitcoin legal tender in 2021, becoming the first country to do so and drawing immediate criticism from the IMF and other multilateral institutions. At the time, the country was negotiating a development loan with the agency, and the Bitcoin law became a persistent friction point in those talks.

The standoff culminated in a $1.4 billion loan agreement struck at the end of December, which required El Salvador to scale back certain aspects of its Bitcoin strategy in exchange for IMF support.

Since then, the two sides have publicly disagreed over what the state is actually doing. The IMF said in September that El Salvador was not purchasing bitcoin with public funds and that its holdings grew through private donations instead. The country's Bitcoin Office has repeatedly insisted that it does buy the cryptocurrency. The IMF reaffirmed in September that the state was — at least for some time — accumulating bitcoin via donations rather than treasury purchases.

The ambiguity dates back to 2022, when Bukele announced the country would buy one bitcoin per day. It was never clear where the money was coming from, or whether the purchases were happening at all.

What are the operational consequences?

The waiver mechanism now anchors the Bitcoin question to the program's formal review calendar. Missing the accumulation criteria did not block the $139 million disbursement because El Salvador offered what the fund called "strong corrective measures and renewed commitments" — effectively a pledge that state involvement will shrink and accumulation will stop beyond documented donations.

For Salvadoran public finances, the practical effect is a cap on one channel of state exposure to Bitcoin. The 2021 rollout, which included gifting bitcoin to citizens and launching a state-backed wallet in the hope of driving adoption in the dollarized economy, underperformed as a payments initiative. Bukele admitted in a 2024 interview that Salvadorans were not using the cryptocurrency for purchases as expected, even as the government continued to tout its accumulation strategy.

The next test will come at the subsequent program reviews, where the fund will verify whether the promised limits on state Bitcoin activity — and the freeze on accumulation beyond donations — have held.