Currently, El Salvador holds approximately 6,000 Bitcoin, valued at around $586 million, a significant drop from the 5,600 BTC worth over $400 million that were transferred to cold storage in March 2024.

Additionally, the IMF plans to increase bank liquidity from 11.5% to 15% of deposits by June 2026, further bolstering the banking sector's importance.

El Salvador's decision to prioritize economic stability over Bitcoin's adoption may influence other countries, challenging the perception of Bitcoin as a viable reserve asset.

As a result of these changes, Bitcoin-related economic activities will be restricted, and tax payments will now only be accepted in US dollars, limiting the use of the local crypto e-wallet, Chivo.

The agreement includes commitments to enhance transparency, governance, and anti-corruption measures, aligning El Salvador with international standards.

On January 29, 2025, El Salvador's legislative assembly voted overwhelmingly to strip Bitcoin of its status as a currency, mandating businesses to transact in the national currency while still retaining Bitcoin's legal tender designation.

The IMF deal, structured over 40 months under the Extended Fund Facility, is expected to improve El Salvador's economy, projecting a GDP growth of 3.5% over three years and a reduction in the public debt-to-GDP ratio.

El Salvador has paused its Bitcoin purchases due to pressure from the International Monetary Fund (IMF) related to a $1.4 billion loan agreement.

Critics argue that the experiment of using Bitcoin as legal tender has failed, noting that only 8% of Salvadorans have used Bitcoin even once.

This shift in policy reflects a broader move away from Bitcoin's adoption as a mainstream payment method, following a series of reforms aimed at stabilizing the economy.

As part of the IMF agreement, the country has agreed to reduce its Bitcoin-related activities and make Bitcoin adoption voluntary for private businesses, resulting in legislative changes passed in January 2025.

Despite halting daily purchases, El Salvador has made larger Bitcoin transactions, including a $1 million purchase in December 2024 and an acquisition of 11 BTC valued at over $1 million in early February 2025.