El Salvador's Bitcoin Buys: An Illusion?
A recent report has cast doubt on El Salvador’s Bitcoin strategy. Throughout 2025, President Nayib Bukele and the National Bitcoin Office stated they were purchasing one Bitcoin daily.
While public trackers indicated holdings had surpassed 6,102 BTC, an IMF Article IV consultation on July 15 revealed that no new purchases occurred after the approval of the $1.4 billion Extended Fund Facility in December 2024.
Wallet Transfers Mimicked Purchases
According to the IMF report, the increase in public-sector Bitcoin holdings was not due to new investments. Instead, the government internally transferred coins between its own wallets.
These internal transfers artificially inflated balances on public dashboards, creating a false impression of ongoing purchases. These actions did not involve new taxpayer funds or market activity. Minor fluctuations in the Chivo e-wallet also resulted from internal adjustments rather than fresh deposits.
Turns out the IMF did in fact make El Salvador stop Bitcoin purchases in order to get a fiat loan.
Footnote #9 states they have just been making it appear as if they have been continuing to buy but in fact have just been consolidating multi government wallets.
Source :… pic.twitter.com/46AFU1oi08
— Magoo PhD (@HodlMagoo) July 17, 2025
Reversal of Bitcoin Legal Tender Status
In 2021, El Salvador made headlines by adopting Bitcoin as legal tender, sparking global debate. However, reports indicate that the country reversed this decision in January 2025 due to pressure from international lenders.
El Salvador revoked Bitcoin's legal tender status and committed to ceasing the use of public funds for Bitcoin purchases. The IMF’s report confirms that these commitments have been upheld.
Chivo E-Wallet Shutdown Imminent
The government is required to end public-sector involvement in the Chivo system by July 31, 2025. Additionally, El Salvador has pledged to dissolve Fidebitcoin, its public Bitcoin trust. These measures aim to enhance fiscal transparency and ensure the Extended Fund Facility remains on track.
Analysts Question Trust and Transparency
Experts suggest that these actions raise concerns about trust. The practice of shuffling coins between wallets while claiming new purchases can damage the government’s credibility. This may lead citizens and investors to question the reliability of future statements.
Even without new financial transactions, the discrepancy between official claims and reality has highlighted issues with data sharing.
While the IMF acknowledged El Salvador's compliance with its program targets, the coming weeks will reveal whether the government fulfills all its commitments.
The closure of Chivo and dissolution of Fidebitcoin represent significant steps. Adherence to this plan could help El Salvador rebuild trust. Conversely, failure to comply may fuel skepticism regarding future Bitcoin-related announcements.
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