The government of El Salvador has suspended the use of public funds to purchase Bitcoin in order to comply with the terms of a $1.4 billion loan from the International Monetary Fund (IMF).The director of the IMF's Western Hemisphere department, Rodrigo Valdez, confirmed that the country is in full compliance with the terms of the loan agreement.

As required by the IMF Extended Fund Arrangement, government agencies in El Salvador stopped accumulating Bitcoin with public funds. Valdez emphasized that the country has not only complied with the terms of the Bitcoin arrangement, but has also made progress in fiscal transparency, structural reforms and governance improvements.

President Nayib Buklai has continued to increase his holdings of Bitcoin through non-public funding channels, despite a halt in purchases by the public sector. Data from El Salvador's National Bitcoin Office shows that the country maintains a pace of purchasing one Bitcoin per day, but the source of the funds has not been publicly disclosed. There is speculation that it may be using the proceeds of its strategic Bitcoin reserves to make acquisitions.

El Salvador's current holdings of 6,158 Bitcoins are worth more than $583 million at current market prices, a significant increase in value from the initial purchase price. The country's innovative strategic reserve model has attracted international attention, with countries such as Japan seen as a potential emulator.

According to the IMF, the focus of the loan program goes well beyond cryptocurrency policy and includes a 40-month comprehensive fiscal adjustment, governance reforms and transparency enhancements aimed at boosting private investment and economic growth. At the heart of the El Salvador program are deep structural reforms," Valdez said.

While the Buccleuch administration has positioned the Bitcoin strategy as a key measure to promote financial inclusion and reduce reliance on the U.S. dollar, domestic opinion remains divided. With the IMF's first evaluation of its lending program coming up, how El Salvador balances compliance with international norms with advancing the crypto agenda will continue to be closely watched by the global crypto market.

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