El Salvador’s agreement with the IMF could shutter the country’s state-backed Bitcoin wallet Chivo, but not its overall BTC support.
Bitcoin-friendly nation El Salvador will sunset or sell its Chivo crypto wallet as it scales back Bitcoin (BTC) activity as part of terms to secure a $1.4 billion International Monetary Fund loan.
Stacy Herbert, director of El Salvador’s national Bitcoin office, said the decision was part of its agreement with the IMF. Notably, Chivo’s fate will not impact BTC laws in the country, and Bitcoin will remain available as legal tender under the IMF deal per Reuters.
El Salvador introduced Chivo in August 2021, around the same time it legalized Bitcoin nationally. Chivo served as the sovereign crypto wallet to propel President Bukele’s ambitious BTC agenda.
Citizens received BTC rewards for signing up with Chivo at the time, but the crypto wallet suffered several setbacks. Hackers attacked Chivo on at least two occasions, exposing sensitive user data and leaking the wallet’s code in April 2024.
El Salvador’s Bitcoin bet
Despite Chivo’s likely shutdown, El Salvador remains a pro-BTC powerhouse. Under President Bukele, the country became the first jurisdiction to adopt BTC as legal tender and deploy state funds for Bitcoin purchases.
Since September 2021, when it legalized BTC, President Bukele has overseen a $270 million investment into the trillion-dollar asset.
El Salvador held over $632 million in BTC at press time, with $362 million in unrealized profits from its Bitcoin bet. BTC’s rise above $100,000 triggered growth in El Salvador’s bond markets, a landmark moment in crypto history. It was the first time BTC price patterns impacted sovereign-issued debt.
Other nations like Brazil and the U.S. have now announced plans to explore Bitcoin reserve laws, following years crypto skepticism.
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