Chivo Wallet Faces Potential Shutdown as IMF Tightens Grip on El Salvador's Bitcoin Strategy

When El Salvador’s President Nayib Bukele launched the Chivo wallet in September 2021, it symbolized the nation’s bold pivot toward cryptocurrency adoption. Today, that same initiative finds itself under intense international scrutiny. The IMF’s second review of El Salvador’s 40-month Extended Fund Facility has placed the government e-wallet at the center of contentious negotiations, with potential phase-out or sale discussions moving into advanced stages.

IMF Demands Transparency and Risk Management

The International Monetary Fund’s primary concerns revolve around Bitcoin’s price volatility and its potential impact on public finances. The fund has consistently pushed El Salvador to curtail government Bitcoin purchases, mining operations, and treasury accumulation. In March, after an ultimatum from the IMF, the Salvadoran government scaled back state involvement in Bitcoin acquisition to maintain access to critical international financing.

The negotiation framework now centers on three pillars: enhancing transparency, safeguarding public resources, and mitigating cryptocurrency-related risks. According to IMF statements, discussions regarding the Chivo wallet sale are described as “well advanced,” signaling that a resolution may be imminent. This represents a significant policy shift for a government that once championed Bitcoin as legal tender.

El Salvador’s Economic Performance Complicates the Picture

Despite external pressure, El Salvador’s macroeconomic indicators paint a resilient picture. The nation’s GDP growth is tracking near 4% for the current year, with momentum expected to carry into 2026. Fiscal targets have been met, international reserves have strengthened, and domestic debt has contracted—outcomes that arguably underscore the effectiveness of broader economic reforms.

The government’s Bitcoin Office continues to report consistent holdings: 7,509.37 BTC, valued at approximately $656 million using previous price levels, though current Bitcoin valuations around $90.59K would place the total at considerably higher levels. Most recently, El Salvador acquired an additional 1 BTC on December 23, demonstrating continued commitment despite international pressure.

Banking sector reforms have progressed substantially, including Basel III implementation, enhanced anti-money laundering frameworks, and reinforced financial stability legislation.

The Pressure Point: Volatility and Policy Constraints

The core tension between El Salvador and the IMF remains rooted in Bitcoin’s inherent volatility. When a nation’s treasury holds significant cryptocurrency exposure, sudden price movements can create fiscal instability. The IMF’s insistence on de-risking reflects conventional monetary policy doctrine, though it directly conflicts with Bukele’s vision for Bitcoin integration.

Negotiations ahead will likely involve close coordination between Salvadoran authorities and IMF officials as they work toward a staff-level agreement to finalize the fund’s review. The Chivo wallet’s fate—whether sold, phased out, or restructured—will signal the extent to which El Salvador compromises on its cryptocurrency ambitions in exchange for international financing stability.

What Comes Next?

This situation encapsulates a broader tension in global finance: the collision between traditional monetary governance and emerging digital asset frameworks. Whether Chivo ultimately exits El Salvador’s policy landscape or survives in altered form remains to be seen. What’s clear is that Bitcoin’s role in national treasuries will continue drawing scrutiny from international financial institutions as the technology matures and adoption spreads.

Analysis based on IMF Extended Fund Facility reviews and El Salvador government reports, December 2025