El Salvador Nears Chivo Wallet Sale Amid IMF Bitcoin Strategy Shift

The potential sale of the Chivo wallet represents a substantial reversal of El Salvador’s crypto ambitions. Launched as the government’s official digital wallet platform, Chivo was central to the country’s 2021 Bitcoin adoption strategy, offering citizens a state-backed tool for cryptocurrency transactions. The International Monetary Fund confirmed on Monday that discussions regarding the wallet’s sale have reached advanced stages, though no timeline, buyer details, or sale structure has been specified. This move forms a critical component of El Salvador’s ongoing efforts to access additional funding under its IMF program, negotiations that have extended over several months as the country seeks to unlock subsequent disbursements designed to bolster economic stability.

El Salvador’s relationship with the IMF grew complicated following the nation’s groundbreaking decision to adopt Bitcoin as legal tender, championed primarily by President Nayib Bukele. The country had initially pursued an Extended Fund Facility worth billions of dollars in early 2021, but those discussions stalled after the cryptocurrency legislation took effect. A breakthrough occurred in 2024 when the two parties reached a $1.4 billion loan arrangement. Under that agreement’s terms, the IMF delivered $120 million in May, with El Salvador committing to halt further Bitcoin acquisitions, curtail government involvement in Bitcoin-related economic activities, ensure private sector cryptocurrency acceptance remained voluntary, and reduce its role in operating the Chivo platform.

Questions have emerged regarding El Salvador’s adherence to these IMF commitments. While the IMF reported in July that no government Bitcoin purchases had occurred since December 2024, the country’s Bitcoin Office has continued publishing announcements of cryptocurrency acquisitions. Most notably, the office declared a November purchase of 1,090 Bitcoin valued at approximately $100 million, creating apparent contradictions with the loan terms. As of Monday, government data indicates El Salvador holds 7,509 Bitcoin in its reserves, accumulated through the buying program initiated under President Bukele’s administration. El Salvador’s government has not issued public statements clarifying its position on these recent Bitcoin acquisitions or addressing the apparent discrepancies with IMF agreement terms.

Despite these uncertainties surrounding Bitcoin purchases, the IMF expressed confidence in El Salvador’s broader fiscal performance. Fund officials praised the government’s dedication to fiscal discipline, noting that the country appears positioned to meet its end-2025 primary balance objectives. The recently approved 2026 budget aligns with goals for further deficit reduction while simultaneously expanding social welfare expenditures, according to the IMF’s assessment. These fiscal measures are reportedly contributing to reserve accumulation and decreased domestic borrowing, both consistent with program benchmarks established under the lending agreement.

The unfolding situation in El Salvador presents a complex case study at the intersection of cryptocurrency innovation and traditional international finance. The country’s move to adopt Bitcoin as legal tender in 2021 positioned it as a global pioneer, but the subsequent negotiations with the IMF highlight the practical challenges of integrating a volatile digital asset into national monetary policy while maintaining access to conventional funding sources. The potential sale of the Chivo wallet symbolizes a pragmatic adjustment, prioritizing economic stability and international financing over the original vision of a fully state-integrated cryptocurrency ecosystem.

The outcome of these advanced discussions will have significant implications for El Salvador’s economic trajectory. Successfully finalizing the Chivo sale and adhering to IMF program terms could unlock further disbursements from the $1.4 billion facility, providing crucial support for the nation’s finances. However, the apparent contradictions between reported Bitcoin purchases and loan conditions underscore the ongoing tension between President Bukele’s crypto-forward policies and the requirements of international financial institutions. As El Salvador navigates this path, the world watches to see whether a nation can balance pioneering digital asset adoption with the disciplined fiscal management demanded by global creditors.