Bukele denies Bitcoin reserve was handed over in IMF deal, says only Chivo shares changed hands

The dispute emerged Friday in San Salvador, where Bukele rejected reports suggesting that the country’s strategic bitcoin holdings had been handed over as part of the IMF agreement.

The El Salvador Bitcoin reserve has remained one of the most closely watched elements of the country’s economic relationship with the IMF since Bukele adopted bitcoin as legal tender in 2021.

The government later removed bitcoin’s legal-tender status in January as part of negotiations surrounding the IMF programme.

The IMF’s latest preliminary agreement unlocked US$140 million in fresh funding for El Salvador under an austerity and reform programme. The institution has also been monitoring the government’s handling of bitcoin holdings, including the operation of the Chivo wallet.

Bukele rejects transfer of El Salvador Bitcoin reserve

Bukele directly disputed claims that the El Salvador Bitcoin reserve had been transferred to a private entity.

Writing on X, the president said: “the only thing that was transferred were Chivo’s shares… and NOT the Strategic Bitcoin Reserve.”

The statement was issued after reports appeared to link the transfer of control over Chivo with the country’s strategic bitcoin holdings.

Bukele’s clarification draws a distinction between two separate government-linked assets: the Chivo wallet operation and the strategic bitcoin reserve.

According to the president, ownership changes involving Chivo did not amount to a transfer of the government’s bitcoin holdings.

The El Salvador Bitcoin reserve has attracted international attention since the country became the first nation to adopt bitcoin as legal tender in 2021. The policy placed Bukele’s administration at the centre of the global debate over whether governments should hold cryptocurrency as part of their national financial strategy.

IMF details changes to Chivo wallet

The IMF’s assessment focused partly on the government’s reduced involvement in the Chivo wallet, the digital platform introduced alongside El Salvador’s bitcoin policy.

The institution said: “public participation in the Chivo wallet has been substantially unwound, and efforts are underway to enhance the transparency of Bitcoin holdings.”

The IMF also said that majority ownership and operational control of Chivo had moved to a private operator.

“Majority ownership and operational control have been transferred to a private operator, while a minority stake and custodial responsibilities for customer assets have been retained by the government,” the IMF said in its statement.

The development has fuelled questions over whether the changes to Chivo also affected control of the El Salvador Bitcoin reserve.

Bukele, however, maintains that the transfer was limited to Chivo shares and did not involve the country’s strategic bitcoin holdings.

The distinction is significant because the Chivo wallet and the government’s bitcoin reserve represent different components of El Salvador’s cryptocurrency strategy.

While Chivo was created as a platform for facilitating bitcoin use among citizens, the strategic reserve represents bitcoin accumulated and held by the government.

IMF funding tied to bitcoin policy

The controversy comes as El Salvador continues implementing reforms agreed with the IMF under its US$1.4 billion financing arrangement.

Bitcoin was a particularly sensitive issue during negotiations because the cryptocurrency had been central to Bukele’s economic agenda since 2021.

El Salvador introduced bitcoin as legal tender alongside the US dollar, becoming the first country to do so. However, the government removed bitcoin’s legal-tender status in January as part of the measures associated with its IMF programme.

The latest preliminary agreement provides US$140 million in additional funding while the government pursues its broader austerity and reform commitments.

The IMF said its assessment found that El Salvador’s continued bitcoin purchases had been financed through private donations rather than public funds.

That finding is important to the future of the El Salvador Bitcoin reserve, because it addresses concerns over whether taxpayer funds were being used to expand the government’s cryptocurrency holdings.

The IMF has also signalled that further accumulation will be limited.

“No further Bitcoin accumulation beyond the documented donations is expected,” the IMF said.

The statement effectively places a boundary around further growth of the El Salvador Bitcoin reserve under the current arrangement.

Transparency remains central to Bitcoin holdings

The latest developments leave transparency around the El Salvador Bitcoin reserve as a major issue for international observers.

The IMF has specifically said efforts are underway to improve transparency surrounding the country’s bitcoin holdings, while Bukele has insisted that the strategic reserve itself remains under government control.

The disagreement is therefore less about whether Chivo has undergone a change in ownership and more about what that change means for El Salvador’s wider cryptocurrency assets.

For Bukele, the distinction is clear: Chivo’s shares were transferred, but the El Salvador Bitcoin reserve was not.

The IMF’s comments similarly distinguish between the private operation of Chivo and the government’s continuing responsibilities over customer assets and bitcoin holdings.

The El Salvador Bitcoin reserve remains a politically and financially significant part of the country’s cryptocurrency experiment, even after bitcoin’s legal-tender status was removed.