El Salvador Bitcoin War: IMF’s $1.4B Ultimatum Rejected—What’s Next for the Economy?

El Salvador’s Bitcoin policy faces criticism again as President Nayib Bukele refuses to stop BTC purchases. The IMF urged the country to halt acquisitions while negotiating a financial deal to stabilize the economy. Concerns about public debt, regulatory risks, and rising global cryptocurrency regulations dominate discussions. However, El Salvador’s security improvements and growing tourism industry offer alternative economic opportunities. Bukele stance fuels debate over whether this strategy will benefit or harm the country’s long-term financial prospects.

IMF vs. Bitcoin: El Salvador’s Financial Future

El Salvador’s President has announced on his X account that his government will not stop buying BTC. This statement comes as a response to the International Monetary Fund’s request to stop Bitcoin purchases. The IMF request comes as a part of a $1.4 billion deal, which funds El Salvador. Nayib Bukele’s response is, “No, it’s not stopping.”. Bukele also stated that the El Salvador Bitcoin accumulation strategy didn’t stop, as the rest of the world doubted this movement. As such, this strategy won’t stop now either. 

“This all stops in April.” “This all stops in June.” “This all stops in December.”

No, it’s not stopping.

If it didn’t stop when the world ostracized us and most “bitcoiners” abandoned us, it won’t stop now, and it won’t stop in the future.

Proof of work > proof of whining https://t.co/9pC0PoY3YQ

— Nayib Bukele (@nayibbukele) March 4, 2025

“This all stops in April.” “This all stops in June.” “This all stops in December.”

No, it’s not stopping.

If it didn’t stop when the world ostracized us and most “bitcoiners” abandoned us, it won’t stop now, and it won’t stop in the future.

Proof of work > proof of whining https://t.co/9pC0PoY3YQ

— Nayib Bukele (@nayibbukele) March 4, 2025

Previously The International Monetary Fund (IMF) approved a 40-month arrangement under the Extended Fund Facility (EFF) for El Salvador. This was to help the country’s future growth and help with economic challenges. IMF’s approval follows the landmark agreement, which was a big reversal of President Nayib Bukele’s policy. This agreement removed the law that mandated the acceptance of BTC in private businesses. It also banned the ability to pay taxes with Bitcoins.

Now, the new report seeks to limit and remove the El Salvador Bitcoin accumulation project. As stated in the report, “Voluntary accumulation of bitcoins includes purchase and mining of Bitcoins and excludes the accumulation of Bitcoins resulting from forfeiture, seizure, apprehension, custody or other form of property or possession by the government arising from law enforcement measures adopted in accordance with Salvadoran law.”. This agreement also brings up the global trend of increased regulation and supervision of cryptocurrencies and argues for global alignment. 

El Salvador’s 87% Debt: Can the IMF Turn Things Around?

Based on the report, the IMF programs are addressing the risks associated with El Salvador’s Bitcoin project. IMF claims that El Salvador’s public debt is equal to 87% of GDP. High interest and the lack of external buffers are also making the economy vulnerable. As such, the program also takes steps to stabilize the country’s economic state. One of this program’s goals is to rationalize the wage bill and prioritize infrastructure funding. As such, if successful, this program is projected to increase El Salvador’s GDP by 3.5% in three years. 

Safer Streets, Stronger Economy: El Salvador Thrives

IMF report claims the country’s growth can be traced to the significant improvement in security. El Salvador is turning into one of the safest countries in the world, and tourism continues to grow. Moreover, this enhancement has attracted many foreign investors. As such, the IMF argues that the country should focus on these industries rather than risky projects. However, as discussed before, El Salvador’s President has made it clear that the country will continue to accumulate BTC. But El Salvador’s compliance with the rest of the requests of the agreement remains unclear. 

Bitcoin and Beyond: The Path to Financial Stability

Nayib Bukele’s policy and strong commitment to Bitcoin create potential benefits and financial risks. These concerns include economic instability, rising national debt, and increasing global regulatory pressure. To move forward successfully, El Salvador must balance Bitcoin adoption with overall financial security. A smart strategy would involve broadening economic growth by focusing more on capitalizing on improved security. Careful oversight can also help the country navigate potential financial challenges. As such, success will require a balanced and strategic approach to sustain long-term growth.