Country Focuses on Structural Reforms Instead of Cryptocurrency Experiments
The International Monetary Fund (IMF) has officially confirmed that El Salvador continues to comply with its commitment not to increase government Bitcoin holdings. This statement was made during the IMF Spring Meetings 2025 for the Western Hemisphere, according to the official press briefing transcript. The $1.4 billion cooperation program between the IMF and El Salvador is focused not on the country’s cryptocurrency experiment but on deeper structural reforms, including improvements in governance, transparency, and fiscal policy.
Bitcoin Freeze Remains in Effect
At the event, Julie Ziegler, Senior Communications Officer at the IMF, began the discussion with a question submitted online by Ion Group. The question concerned why El Salvador had been moving Bitcoin between accounts instead of buying more directly to increase its reserves.
Rodrigo Valdes, Director of the Western Hemisphere Department at the IMF, succinctly answered that El Salvador continues to follow its commitment not to accumulate Bitcoin holdings through the public sector.
“I can confirm that they continue to comply with their commitment of non-accumulation of bitcoin by the overall fiscal sector,” Rodrigo said. He made it clear that no secret transactions were taking place to boost reserves through any hidden maneuvers.
This statement refutes speculation circulating among crypto enthusiasts that El Salvador might be circumventing restrictions by moving funds between various government accounts. According to the IMF representative, the Salvadoran government is fully complying with the agreement terms, which is an important signal to international financial markets about the country’s seriousness regarding economic reforms.
From Crypto Experiments to Structural Reforms
Speaking about El Salvador’s program with the IMF, Rodrigo Valdes particularly emphasized that Bitcoin is not the central element of their economic program. “The program of El Salvador is not about bitcoin. It’s much more, much deeper in structural reforms, in terms of governance, in terms of transparency,” he stated.
Valdes explained that the country is pushing forward substantial changes aimed at increasing transparency and efficiency in government operations. Fiscal reforms are also an important part of the agenda, and he confirmed that authorities are actively working on implementing them.
The country’s cooperation program with the IMF is a 40-month deal worth $1.4 billion, but when counting funds that can be attracted from other international financial institutions, this amount increases to approximately $3.5 billion. Valdes noted that “an important fiscal adjustment” is currently underway as part of this plan. The goal is to make El Salvador a more attractive place for private business investment and help the economy grow faster.
The IMF representative also reported that the fund is preparing the first full review of the program. If everything continues to develop in the same direction, El Salvador can expect even more significant successes. He emphasized that the country now stands on a much stronger macroeconomic foundation than before.
Regional Context: Honduras’ Success as a Model to Follow
During the briefing, the situation in neighboring Honduras was also discussed, which recently reached a staff-level agreement with the IMF. This means the fund is ready to bring the program review, already the second, to the board of directors.
Valdes emphasized that Honduras took decisive steps when global conditions were relatively calm, timely addressing structural and macroeconomic issues. “You repair your roof when it’s sunny outside,” he remarked figuratively, calling Honduras an example of good preparation.
According to Valdes, Honduras improved its reserves, secured additional funding from international financial institutions, reduced inflation, grew its economy, and implemented fiscal reforms, making the country more resilient to future shocks compared to its previous state.
This comparative analysis provides a better understanding of the context in which El Salvador’s relations with the IMF are developing. Both countries are implementing serious economic transformations, but while Honduras is following a more traditional path, El Salvador combines standard reforms with an innovative, though temporarily suspended, experiment in cryptocurrencies.
Dual Effect: Economic Reforms and Security Improvements
Beyond economic transformations, Valdes noted another important factor favorably affecting El Salvador’s prospects—the significant improvement in the country’s security situation over the past few years. According to him, this progress will create additional benefits that will enhance the positive effect of economic improvement.
Indeed, El Salvador, once known as one of the most dangerous countries in the world, has achieved a substantial reduction in violence levels. President Nayib Bukele’s policies against gang activity, despite criticism from human rights organizations, have led to a sharp decline in homicides and other violent crimes.
This multifaceted transformation—economic reforms combined with improved security—creates potential for sustainable growth that may exceed the expectations of many international observers. However, the key condition for realizing this potential remains disciplined implementation of the IMF program, including restraint regarding further government accumulation of Bitcoin.
Thus, El Salvador stands at a crossroads between an innovative cryptocurrency experiment and a more traditional path of economic reforms. The IMF’s confirmation of the country’s compliance with Bitcoin freeze commitments indicates that preference is currently being given to the latter. However, El Salvador’s unique status as the first country to recognize Bitcoin as legal tender continues to attract the attention of the international community and may influence future decisions of other developing economies.