Bitcoin Law Faces Scrutiny in El Salvador

By Eproint

In March 2025, the Executive Board of the International Monetary Fund (IMF) concluded its Article IV consultation with El Salvador, offering a comprehensive assessment of the country’s macroeconomic performance and policy framework. Despite external pressures, the IMF recognized that El Salvador’s economy has shown resilience in recent years.

According to the IMF, the Salvadoran economy performed relatively well in the face of a series of global shocks, growing by an estimated 2.8 percent in 2022. The outlook for 2023 is slightly more moderate, with expected growth of 2.4 percent. These figures reflect a degree of macroeconomic stability and recovery, supported by remittances, domestic consumption, and public investment.

However, the IMF Executive Directors raised concerns about the country’s ongoing approach to cryptocurrency policy. Over a year after the adoption of Bitcoin as legal tender, its use remains minimal across the broader economy. While this limited adoption may have reduced some immediate risks, the IMF warned that significant vulnerabilities persist in terms of financial and market integrity, financial stability, fiscal sustainability, and consumer protection.

In their official statement, Directors emphasized the need to narrow the scope of the Bitcoin Law and urged El Salvador to remove Bitcoin’s legal tender status altogether. They argued that Bitcoin has made little impact on promoting financial inclusion—a key justification used by the government when introducing the measure. Instead, they highlighted ongoing concerns about transparency and accountability in public dealings with crypto assets.

To mitigate these risks, the IMF called on Salvadoran authorities to ensure full transparency in Bitcoin-related transactions, particularly those involving public companies operating in the crypto ecosystem. Financial statements and any related disclosures, the Directors said, should be made publicly available and comply with best practices in financial governance.

Furthermore, the IMF advised caution in the context of new crypto legislation being considered in the country. Directors warned against expanding government exposure to Bitcoin and stressed the importance of thoroughly evaluating the implications of further legal or regulatory steps involving digital assets.