Did El Salvador fake Bitcoin buys to scam the IMF?

In 2021, El Salvador became the first country in the world to make Bitcoin legal tender. President Nayib Bukele said the decision would help the country break free from relying on the US dollar and lower the high costs of sending and receiving money.

The government launched the Chivo Wallet, set up Bitcoin ATMs, promised a tax-free “Bitcoin City,” and planned to raise $1b through “Volcano Bonds” to advance its digital agenda. But what stood out the most was the president’s promise to buy one Bitcoin every day starting in November 2022, and for more than two years, his administration claimed it did. 

On top of that, the government constantly highlighted its commitment to Bitcoin by posting updates about new purchases every week on social media. They used sites like Nayib Tracker to show off the country’s growing reserves and convince everyone that El Salvador wasn’t backing down.

Bitcoin circles praised the country for standing up to traditional finance systems and leading the way for other developing nations, while crypto enthusiasts said its boldness was visionary.

In reality, El Salvador urgently needed money. The country faced rising debt, a growing budget gap, and increasing pressure to rebuild trust with international lenders. The financial situation was more fragile than it seemed, so the government quietly worked out a $1.4 billion loan deal with the International Monetary Fund (IMF), agreeing to follow strict conditions to get the support it needed.

In July 2025, the IMF review revealed El Salvador hadn’t bought any new Bitcoin since February, just weeks after finalizing the deal. This shocking news raised a big question: Did El Salvador believe in Bitcoin, or was it just putting on a show to get money from the IMF?

Officials told one story to the IMF and another to the public

El Salvador faced growing debt and economic pressure by late 2024. Its bold Bitcoin experiment grabbed headlines but failed to attract the broad economic relief the government expected. While tourism rose slightly and a few Bitcoin influencers showed interest, issues like rising deficits, weak public trust, stalled projects, and a broken Chivo Wallet remained unresolved.

The government had no choice but to turn to the IMF (an organization it once resisted) for help because it urgently needed to secure reliable funding. 

After months of talks, El Salvador secured a 40-month, $1.4 billion loan from the IMF in December 2024. The deal aimed to stabilize the economy and rebuild trust with global partners and investors, but also came with strict conditions. 

The country agreed to stop buying more Bitcoin, make its use optional instead of mandatory, limit government control of the Chivo Wallet, and increase transparency in all state-run crypto activities.

The government quietly told the IMF it had stopped buying Bitcoin in February 2025 but kept that information from the public. Instead, President Bukele and the National Bitcoin Office kept posting on social media as if they were still buying Bitcoin every day.

The new IMF report released in July 2025 revealed that there had been no new public Bitcoin purchases for months. A letter was attached to the review stating that “the stock of Bitcoins held by the public sector remains unchanged.” Worse, it was signed by the country’s central bank president and the finance minister.

A small but telling detail in footnote nine revealed that the rise in El Salvador’s Bitcoin reserve came from moving existing Bitcoin between wallets and not from new purchases or market gains. In short, the government was just shifting Bitcoin between its own wallets, rearranging its holdings without adding anything new.

The government carefully followed the IMF’s rules to unlock funding and keep creditors happy, while still pretending to the public that it was fully committed to Bitcoin and daily buys.

Leaders faked Bitcoin buys to secure a $1.4b loan

Did the government knowingly mislead the public about buying Bitcoin, or was it just using a smart strategy to get funding while keeping its crypto image alive? That’s the question at the heart of El Salvador’s Bitcoin saga.

It was clear that President Bukele’s team and top financial advisors entered IMF talks knowing the loan required big changes to their digital asset policies. Yet they kept making public claims that told a different story, even after agreeing to the terms and confirming compliance in official documents sent to the IMF in early 2025.

The government’s mixed messaging showed a clear strategy: win over both the public and global lenders. It not only cooperated with the IMF, accepted strict conditions, and secured not just the $1.4 billion loan in private, but also got over $2 billion more from the World Bank and IDB. 

The government faced public pressure to protect its crypto image as it met IMF demands behind the scenes. Bukele had used Bitcoin to brand El Salvador as a bold, tech-driven nation challenging global powers since 2021. The story drew media attention, crypto tourists, and praise from Bitcoin supporters. Admitting it had stopped buying Bitcoin or was following IMF rules could damage that image, show weakness, and change their story from rebellion to retreat. 

For this reason, the government likely chose to balance truth and image out of political and economic need and not out of malice. It protected its brand, energized supporters, and postponed the fallout of changing course by keeping the Bitcoin buying story alive. It also unlocked vital funding, kept creditors calm, and avoided deeper economic trouble by quietly following IMF rules.

This double strategy offered short-term rewards but relied on a fragile illusion that could fall apart if people saw the gap between what the government said and what it actually did.

El Salvador’s story sends a warning to other countries

El Salvador never said it had stopped using Bitcoin, but behind the scenes, it quietly let key parts of the story fade while still showing strong support in public. This double strategy worked for a while because the IMF got its reforms, and the crypto world kept believing.

But in July 2025, the IMF report confirmed the government hadn’t bought any Bitcoin since February. That revealed the truth and showed how weak the Bitcoin experiment was when real economic pressure hit.

El Salvador’s example is a warning for countries in Africa, Southeast Asia, and Latin America, considering similar experiments. It tried to lead the way in using Bitcoin as national policy, but the bold experiment gave way to quiet retreat when debt, weak systems, and real-world demands hit. Bitcoin didn’t fail because the technology still works. But without transparency, solid rules, and reliable infrastructure, the plan was never built to last.

This raises a bigger question: Can Bitcoin really work as national policy, or is it too unstable and risky to last? Are governments serious about change, or just using crypto to distract the public, delay tough choices, and polish their image?

In El Salvador’s case, the picture is clear. Bitcoin brought attention, boosted the president’s popularity, and created an image of progress. But once that image collapsed, the country was still deep in debt, reliant on foreign loans, and left to fix the confusion it helped create.

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