IMF and El Salvador Keep Talks on Bitcoin Adoption as Chivo Card Sales Slow
The IMF and El Salvador are continuing negotiations after recent meetings in Washington to address fiscal, governance and regulatory risks arising from El Salvador’s 2021 adoption of Bitcoin as legal tender and the state-backed Chivo e-wallet. IMF staff have highlighted concerns about financial stability, anti-money-laundering controls, fiscal accounting and transparency of bitcoin-related reserves and flows. El Salvador’s government defends the policy on grounds of financial inclusion and technological innovation and continues buying roughly one BTC per day as part of its holdings. Talks also touch on the future or possible restructuring/sale of the Chivo wallet and efforts to shield public finances from crypto volatility. Separate data show sales of the physical Chivo debit card have slowed notably since rollout, raising questions about user adoption of government-backed payment infrastructure. Negotiations aim to resolve IMF concerns while allowing Salvadoran bitcoin initiatives to proceed where possible — a development traders should watch for effects on market confidence, sovereign bitcoin supply disclosures and any change in state-selling behavior.
Neutral
The news is neutral for bitcoin price direction overall. On one hand, IMF scrutiny raises regulatory and fiscal concerns that could weigh on market sentiment and reduce investor appetite, which is bearish. Issues highlighted—financial stability, AML controls and transparency—could prompt tighter oversight or public pressure to limit sovereign bitcoin exposure. Slowing Chivo card sales signal weaker domestic adoption, which may reduce the perceived success of El Salvador’s experiment and dent narrative-driven demand.
On the other hand, talks explicitly aim to allow El Salvador to continue parts of its bitcoin agenda while addressing risks, and the government maintains regular BTC purchases. Continued state buying and the absence of an enforced reversal reduce immediate downside risk from large-scale sovereign sales, which tempers negative price impact. The negotiations may also improve transparency if resolved, which could support confidence in the medium term.
Short-term impact: possible volatility and downward pressure on BTC sentiment amid headlines about IMF concerns. Long-term impact: depends on outcomes — stronger oversight and transparency would be neutral-to-positive by lowering sovereign-tail risk; a forced unwind or sale of reserves would be clearly bearish. Given current information (ongoing talks, no reversal, continued buys but weak Chivo adoption), classify impact as neutral.