The IMF states that El Salvador will not buy out more Bitcoin after securing a loan of 1.4 billion dollars.

The International Monetary Fund has maintained that El Salvador is not acquiring more Bitcoin after signing a funding agreement to reduce its activity with BTC. However, the recent buy out of digital assets by the country's president, Nayib Bukele, seems to contradict the fund's statement.

El Salvador obtained a loan of 1.4 billion dollars on the condition that it reduced its activity with Bitcoin and stopped its purchases of BTC. Bukele had announced in November 2022 that the country would acquire one BTC daily.

El Salvador acquires more BTC

President Nayib Bukele announced over the weekend an additional buy out of 21 BTC to celebrate the fourth anniversary of El Salvador's Bitcoin Law. The acquisition added another 2.3 million dollars in Bitcoin to the government's new transparent blockchain coffers.

On-chain data shows that El Salvador holds approximately 6,318 BTC with an approximate value of 726.8 million dollars. The country's Bitcoin Office agrees with this data but indicates that El Salvador has added 28 BTC in the last 7 days and 51 BTC in the last 30 days.

The IMF questions this data, alleging that both parties signed an agreement that obliged the country to reduce its experiment with Bitcoin. The fund argued that the purchases of BTC are all false.

“We can confirm that the total amount of Bitcoin owned by the government has not increased and that the rise in the Bitcoin Reserve Fund corresponds to movements between government wallets,” said Meera Louis, Communications Officer at the IMF.

The communications department of the government of El Salvador revealed that the President is buying out more Bitcoin. On-chain data also shows that the country's BTC wallets are growing by 1 BTC daily, with deposits coming from cryptocurrency exchanges like Gate and other random addresses.

Previously, the country had limited transparency regarding BTC purchases, as they were only traceable through Bukele's tweets. The President used to irreverently boast about his purchases, even saying once that he bought BTC with his phone while he was in the bathroom.

The cryptocurrency analysis firm Bubblemaps argued that there is no way to confirm on the blockchain when the Bitcoin being transferred today was actually bought. The firm believes that the country may have acquired the BTC some time ago, before the 2024 agreement with the IMF, and the digital assets remained inactive in an exchange account before reaching the publicly revealed wallets.

Bubblemaps also explained that recent transactions from El Salvador may have been routed through exchanges to make them appear as new buy outs. The analysis firm stated that it is impossible to determine this, as third parties cannot access the transaction ledger of an exchange without the exchange releasing the data.

Bukele challenges the agreement with the IMF

James Bosworth, founder and CEO of Hxagon, said there should have been more transparency with the buy outs from the beginning, regardless of whether the BTC acquisitions are new or not. He argued that Bukele was not buying all the BTC on the open market, but moving the digital assets as a kind of government-backed money laundering.

Bosworth stated that the President's unprofessional management of Bitcoin continues to cloud the budgetary situation. He asserted that digital assets should be resources of the government and the Salvadoran people, and not personal wallets of Bukele that he can use to play trading.

Even after the agreement, Bukele continues to assert that he will do as he pleases, defying the IMF. In March, he declared that the purchases will not stop. The President stated that if the acquisitions did not stop when the world marginalized El Salvador and most bitcoiners left the country, they would not stop now or in the future.

A letter signed by the President of the Central Bank, Douglas Pablo Rodríguez Fuentes, and the Minister of Finance, Jerson Rogelio Posada Molina, on July 15 revealed that El Salvador had provided the IMF with the addresses of all hot and cold wallets for its review and monitoring. The IMF stated that the stock of Bitcoins in the hands of the public sector remains unchanged.