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El Salvador has moved to restructure its national reserves by redistributing its Bitcoin into 14 new wallets, a decision that reshapes the way El Salvador Bitcoin holdings are secured. The announcement was made Friday by the country’s official Bitcoin Office through a post on X, formerly Twitter.
According to the office, the redistribution aims to minimize potential exposure to quantum computing threats in the long term. The country had previously stored its 6,274 BTC — currently valued at about $678 million — in a single wallet for transparency purposes. Now, with funds spread across multiple addresses, each holding roughly 500 BTC, officials say the risk of a large-scale breach is reduced.
“Once funds are spent from an address, its public keys are revealed and vulnerable. By splitting funds into smaller amounts, the impact of a potential quantum attack is minimized,” — Bitcoin Office of El Salvador, in a statement on X.
At the core of El Salvador’s move is the growing debate around whether future quantum computers could crack Bitcoin’s elliptic curve cryptography (ECC). In theory, quantum machines running Shor’s algorithm could reverse-engineer private keys from exposed public keys, enabling attackers to redirect funds.
The Bitcoin Office explained that “when a Bitcoin transaction is signed and broadcast, the public key becomes visible on the blockchain, potentially exposing the address to quantum attacks.” Splitting the reserves, therefore, is a way to limit potential exposure.
However, most experts argue that such concerns remain theoretical. A recent report by quantum research firm Project Eleven noted that no quantum computer has managed to crack even a 3-bit key using Shor’s algorithm, far short of Bitcoin’s 256-bit encryption standard. The report estimated that more than 6 million BTC — valued at around $650 billion — could theoretically be at risk if such breakthroughs ever materialized.
Despite the cautious move, many within the crypto industry believe El Salvador Bitcoin holdings face no immediate quantum danger. Michael Saylor, co-founder of MicroStrategy and one of Bitcoin’s most vocal advocates, described the fears as overblown.
“The quantum computing threat to Bitcoin is mere hype. If it ever became a genuine concern, the answer is simple: network hardware and software upgrades, just like Microsoft, Google, or the U.S. government do,” — Michael Saylor, Executive Chairman, MicroStrategy, in a June interview.
Other experts share the same view, pointing out that Bitcoin’s open-source nature ensures that upgrades could be rapidly implemented if required. As a result, El Salvador Bitcoin holdings remain secure under current global technological conditions.
By diversifying its reserves, the Salvadoran government faces the challenge of maintaining the same level of transparency that came with a single wallet. To address this, officials confirmed they will continue to use a public dashboard managed by the Bitcoin Office to monitor the new wallets.
This approach ensures that the public and investors can track El Salvador Bitcoin holdings in real time, while also protecting against risks associated with repeatedly exposing the same public keys.
The decision also underscores how the country is attempting to balance innovation with responsibility. Since adopting Bitcoin as legal tender in 2021, El Salvador has been under global scrutiny — especially from the International Monetary Fund (IMF).
The redistribution of El Salvador Bitcoin holdings comes at a time of ongoing disputes with the IMF. In July, the organization published a report suggesting the country had not purchased any new Bitcoin since February, raising questions about the government’s transparency.
El Salvador previously secured a $1.4 billion funding arrangement with the IMF in December 2024, agreeing to scale back some of its Bitcoin-related initiatives. While the government accepted conditions allowing Bitcoin to remain legal tender, it resisted other measures viewed as restrictions on its digital currency strategy.
For crypto investors, the redistribution of El Salvador Bitcoin holdings signals a dual strategy: proactive steps to address speculative risks while navigating the political and financial realities of international oversight.
The move highlights broader questions about the security and future-proofing of state-level crypto reserves. While El Salvador Bitcoin holdings remain relatively small compared to the global market, the country’s policies serve as a test case for other governments considering similar strategies.
If quantum threats remain a distant prospect, El Salvador’s decision could be viewed as an overcautious but instructive step. If, however, breakthroughs accelerate in quantum computing, the diversification of wallets may prove to be a model for safeguarding national digital assets.
For now, investors can expect El Salvador Bitcoin holdings to remain a focal point in both global policy debates and discussions about the resilience of crypto infrastructure in an uncertain technological future.
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