IMF Releases $138 Million to El Salvador and Waives Its Bitcoin Breach: New Coins Counted as Donations

What the IMF decided

On October 1, 2026, the Executive Board of the International Monetary Fund completed the second and third reviews of El Salvador's Extended Fund Facility (EFF). Both reviews were handled as one package: the Fund and the government had reached a staff-level agreement back on September 3. The board's decision unlocked an immediate disbursement of SDR 101.96 million. The IMF press release puts that at about $138 million, while Bloomberg counted $139 million; the gap comes down to the exchange rate used to convert SDRs, the Fund's unit of account, into dollars.

The program itself runs for 40 months and was approved on February 26, 2025. In total El Salvador can draw SDR 1,033.92 million under it, or roughly $1.4 billion. The money arrives in tranches, and the Fund releases each one after checking how the country is meeting its conditions.

On the economy, the IMF is broadly satisfied. By the Fund's estimates, El Salvador's GDP grew 3.9% in 2025, growth of 4.5% is expected for 2026, and international reserves should reach about $5.35 billion by year end. The Fund credits better security and stronger investor confidence.

What El Salvador breached

Bitcoin is a different story. One of the program's conditions bars the public sector from voluntarily adding to its bitcoin holdings, meaning buying or mining new coins. Private individuals aren't covered by it: Salvadorans can still turn to a crypto exchange to buy bitcoin with USDT and keep the coins in their own wallets. The condition applies at all times, not just on review dates. IMF First Deputy Managing Director Dan Katz acknowledged that some performance criteria were missed, "including on the Bitcoin accumulation front." The board approved the payment anyway and granted a waiver, the formal pardon for a breach, citing the government's "strong corrective measures and renewed commitments."

Where the new coins came from

According to documents El Salvador showed the Fund, all the bitcoin that entered the reserve after the first review in late June 2025 came from private donations, and no budget money was spent on it. The Fund explained the growth in summer 2025 differently: coins held at various government addresses were consolidated into a single Strategic Bitcoin Reserve wallet. Neither the IMF nor the government has disclosed who donated or how much, Bitcoin.com News notes.

The November episode does not fit neatly. At the time, as The Block and Bloomberg reported, the Bitcoin Office itself presented the 1,090 BTC addition as a dip purchase, and its head Stacy Herbert had said before that the country keeps buying. In the version the Fund accepted, every coin since June 2025 counts as a donation. Nobody has publicly reconciled the two accounts.

What the IMF expects next

The key line of the decision: no further bitcoin accumulation beyond the documented donations is envisaged. El Salvador cannot buy coins with budget money. Donations technically remain an open door, but each one will have to be backed by documents shown to the Fund.

Dan Katz added that the state's remaining involvement in bitcoin projects "should be fully unwound," and what is left in the meantime needs transparency and oversight. One of the corrective measures the Fund pointed to is Chivo. Majority ownership and operational control of the state wallet passed to a private operator, while the government kept a minority stake and custodial functions. Chivo has always been custodial: the operator, not the user, holds the keys to the coins. If you are deciding where to keep your own coins, our guide on the difference between a custodial and a non-custodial wallet will help.

What changed for Salvadorans

From September 7, 2021, bitcoin was legal tender in El Salvador, and businesses were required to accept it. At launch Chivo gave every registered user $30 in bitcoin. On January 29, 2025, already under the IMF deal, the Legislative Assembly voted 55 to 2 to rewrite the Bitcoin Law:

• accepting bitcoin is now voluntary, and the obligation for businesses is gone;
• taxes can no longer be paid in bitcoin, the state only takes dollars;
• provisions on state backing for automatic bitcoin-to-dollar conversion were repealed.

There is no ban, though. Bitcoin stays legal in El Salvador: you can hold it, trade it and accept it as payment if both sides agree. Few people used it even before the reform: according to a survey by the Central American University (UCA), 92% of residents did not pay with bitcoin even once in 2024.

Everyday payments in the country run in US dollars anyway. The wider region works the same way: people mostly hold dollars in crypto, and we covered in detail why stablecoins became Latin America's main cryptocurrency. If you get paid in bitcoin but cover your bills in dollars, the simplest move is to exchange BTC to USDT on TRON and keep the digital dollars in your own wallet. On VertEXchange you don't need an account, email or phone for that, and the USDT arrives straight at your address.

Why it matters for the market

El Salvador has been the most visible government building a bitcoin reserve through market purchases rather than seizures. Since November 2022, the Bitcoin Office had been adding one coin a day, The Block reported. In September 2026 the reserve grew by roughly 28 coins, close to the old pace, except that on paper these are now donations.

For the price, volumes like these barely register. The whole reserve is worth more than $600 million at current prices, while US spot bitcoin ETFs took in $2.39 billion in the single week of September 21 to 25 alone. Large players watch the funds first: it was the return of ETF inflows that Citigroup built its new bitcoin forecast on. And September itself saw bitcoin close higher despite the September curse with no help from El Salvador.

The precedent matters more. The IMF decision shows where the line runs for a country under a Fund program: keeping what it already holds is fine, buying with budget money is not, and gifts are accepted only with paperwork. Other governments that are debating bitcoin reserves of their own while depending on IMF money can now point to this case.

What to watch

• whether anyone ever discloses who donated bitcoin to El Salvador and how much;
• whether the reserve keeps growing and how fast: the Bitcoin Office shows its balance publicly;
• when the state fully exits Chivo, as the Fund requires.