IMF warns El Salvador's Bitcoin action: Aid conditions raise the "no increase in BTC" red line

El Salvador's bitcoin holdings are in the spotlight again, the IMF is demanding an end to its holdings in exchange for bailouts, and President Bugley has taken a hard line, highlighting regulatory challenges for sovereigns and international financial institutions. (Synopsis: El Salvador can't bet on Bitcoin? Reached a 1.4 billion magnesium loan agreement with the IMF, which will limit the purchase of BTC) (background addition: embrace Bitcoin + strong anti-gang action! El Salvador welcomes 3.9 million tourists in 2024, a record increase of 22% annually El Salvador, the first country in the world to list bitcoin as legal tender, has recently raised concerns from the International Monetary Fund (IMF) due to its bitcoin policy, which recently made it clear that it is committed to "ensure" that the Salvadoran government does not increase its bitcoin holdings, in stark contrast to the country's President Nayib Bukele's continued increase in holdings. The struggle between the two sides under the bailout agreement is not only about El Salvador's finances, but also reflects the complex interaction between sovereign countries embracing crypto assets and international financial regulation. IMF draws red line on El Salvador's bitcoin policy The IMF stated on May 27, 2025, that it would work to "ensure" that El Salvador's national bitcoin holdings do not increase. The announcement comes as the IMF and El Salvador have reached a preliminary agreement on an extended fund arrangement (EFF) totaling $1.4 billion (up to about $3.5 billion), under which El Salvador has agreed to restrict bitcoin-related activities in order to obtain long-term IMF loans, including amending the bitcoin law to change the acceptance of bitcoin payments by private companies from mandatory to voluntary, and the IMF is cautious about El Salvador's bitcoin reserves and concerns about their potential risks. However, President Bugley of El Salvador has been a staunch advocate of Bitcoin. Even after reaching an agreement with the IMF, he publicly stated that he would continue to buy bitcoin. He posted on Platform X in March 2025: "No, it won't stop... If the world rejected us and most of the 'Bitcoin supporters' abandoned us, it won't stop now, and it won't stop in the future." The government of El Salvador views Bitcoin as a long-term sovereign investment similar to gold. According to Bloomberg terminal data, as of May 2025, El Salvador held about 6,189 to 6,190 bitcoins worth about $675 million to $678 million, with an unrealized profit of more than $350 million. There are also reports that El Salvador may still increase its holdings at a rate of about 1 bitcoin per day, indicating the tension between its actions and the terms of the agreement. IMF Aid Conditions The IMF made a number of demands for Bitcoin in the EFF agreement, including: removing Bitcoin's legal tender status (which was abolished in March), prohibiting the government from using public funds to increase its holdings of Bitcoin, pledging that the total amount of government Bitcoin holdings remain unchanged, and requiring the public sector to phase out state-run Chivo wallets by the end of July 2025. The IMF believes that this move will help reduce the fiscal risk caused by bitcoin price fluctuations, and in the face of El Salvador's possible continuous increase in holdings, the outside world is concerned about whether El Salvador seeks "technical compliance" to accumulate bitcoin through non-governmental entities or other ownership structure adjustments, and at the same time, there are comments that the IMF should not be too loose on the issue of cryptocurrencies. The tug-of-war between sovereign decision-making and international regulation The case of El Salvador highlights the complex relationship between sovereign states and the current international financial system when adopting digital asset strategies. The requirements of national monetary policy sovereignty and international financial stability are particularly prominent in this incident. How the IMF "ensures" that El Salvador does not increase its holdings of bitcoin, and how El Salvador responds, this game around bitcoin reserves not only affects El Salvador's future, but also provides important indicators for the evolution of the global financial order and other developing countries considering the inclusion of cryptocurrencies as national reserves. The follow-up to this tug-of-war will continue to shape the interaction between international aid, sovereign decision-making, and disruptive technologies. Related reports El Salvador can't invest in Bitcoin? Reached a 1.4 billion magnesium loan agreement with the IMF that will restrict the purchase of BTC Argentina cooperates with El Salvador to sign a crypto industry cooperation agreement, will it become the next bitcoin country? El Salvador's president: BTC reporting rate breaks 133%! Did the local people make a lot of money? "IMF warns El Salvador about bitcoin action: bailout conditions pull up the red line of 'no increase in BTC'" This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".