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Negotiations between the International Monetary Fund (IMF) and El Salvador have progressed significantly, with discussions on the country’s Bitcoin project and the potential sale or wind-down of the state-run Chivo e-wallet described as “well advanced” as of December 22-23, 2025.
The update follows the second review of El Salvador’s 40-month Extended Fund Facility (EFF) program, a $1.4 billion arrangement approved earlier in 2025. The IMF has long expressed concerns over fiscal risks, financial stability, and transparency tied to El Salvador’s 2021 adoption of Bitcoin as legal tender. While Bitcoin retains legal tender status and private-sector acceptance remains voluntary, the government has agreed to confine public-sector involvement, including halting active accumulation of BTC (though on-chain data shows continued holdings growth, attributed by some to wallet consolidation).
Central to the talks is the future of Chivo, the government-launched digital wallet intended to boost Bitcoin adoption but criticized for high maintenance costs and limited uptake. Negotiations focus on privatizing or phasing out Chivo to reduce state exposure, allowing private wallets to drive crypto usage. Stacy Herbert, director of El Salvador’s National Bitcoin Office, has confirmed the wallet “will be sold or wound down,” emphasizing that private-sector alternatives will persist.
Broader Bitcoin discussions prioritize enhancing transparency, safeguarding public resources, and mitigating risks. The IMF praised El Salvador’s economic performance, projecting around 4% GDP growth in 2025 amid fiscal consolidation and improved security.
Analysts view this as a pragmatic compromise: El Salvador demonstrates fiscal discipline to access IMF support while preserving its pro-Bitcoin stance long-term. Outcomes could influence:
* Further IMF disbursements and debt management
* Regulatory refinements for digital assets
* Shift toward private-led crypto innovation
As compliance deadlines approach by end-2025, the talks signal El Salvador’s evolving balance between international obligations and its pioneering role in cryptocurrency.
