El Salvador Announces Purchase of a Bitcoin, Bringing the Total in the Country's Strategic Reserve to Above 6102 Coins

The bitcoin purchase announcement comes days after the International Monetary Fund board approved a 40-month program with El Salvador for $1.4 billion that implied a downgrade of the cryptocurrency's status in the Central American country.

El Salvador announced on Wednesday the purchase of one bitcoin, which takes the total in the country’s strategic reserve to above 6,102 coins, the National Bitcoin Office posted on social media.

The bitcoin purchase announcement comes days after the International Monetary Fund board approved a 40-month program with El Salvador for $1.4 billion that implied a downgrade of the cryptocurrency’s status in the Central American country.

Bitcoin cannot be used to pay taxes and its acceptance by the public is voluntary, which is not what was expected when it was given a legal tender status back in 2021.

Importantly, the government has committed to the IMF not to accumulate further bitcoins “at the level of the overall public sector” according to the IMF.

“We consulted with the (Salvadoran) authorities, and they have assured us that the recent increase in Bitcoin holdings in the Strategic Bitcoin Reserve Fund is consistent with agreed program conditionality,” a fund spokesperson said.

The IMF did not respond to further questions on how purchases by the national office do not add to the government’s exposure to the cryptocurrency.

The Salvadoran Presidential House did not immediately respond to a request for comment.

Salvadoran government dollar bonds were mostly down in price on Wednesday, with the 2050 and 2041 maturities down 0.75 cents on the dollar.

El Salvador has bought 12 bitcoins since the IMF announced last week the board approval of the agreement reached in December. It currently holds nearly $550 million in bitcoin, according to the government.