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El Salvador's President Denies Bitcoin Reserve Transfer Amid IMF Deal
President Nayib Bukele of El Salvador has refuted claims that the country transferred its sovereign Bitcoin reserves to private entities, labeling such reports as "totally false." This clarification follows the International Monetary Fund's (IMF) recent announcement regarding a staff-level agreement tied to El Salvador's $1.4 billion Extended Fund Facility program, which could potentially unlock $140 million in new disbursements pending board approval.
Bukele explained that only equity shares in the Chivo wallet, the government-backed Bitcoin payment application, were transferred to a private operator, while the nation's Strategic Bitcoin Reserve, which holds approximately 7,764 BTC valued between $618 million and $632 million, remains under government control. The confusion arose from the IMF's language, which indicated that majority ownership and operational control of the Chivo wallet had changed hands, while the government retains a minority stake and continues to act as custodian for customer assets.
The Chivo wallet was launched in 2021 as part of El Salvador's historic decision to adopt Bitcoin as legal tender. In contrast, the Strategic Bitcoin Reserve is a separate entity that has accumulated Bitcoin over several years. Bukele emphasized that the reserve has not been affected by the recent changes in the Chivo wallet's management structure.
This situation underscores the complex relationship between El Salvador and the IMF, particularly after the country revoked Bitcoin's legal tender status earlier this year as a condition for the funding deal. Despite these challenges, Bukele has maintained that the Strategic Bitcoin Reserve remains intact and has even grown through private donations, aligning with IMF stipulations that prohibit the use of public funds for Bitcoin acquisitions.
Source: KLEA News