El Salvador Bolsters Bitcoin Holdings Amid Economic Reforms

El Salvador has added another seven bitcoins to its national treasury, now holding a total of 6,173 BTC. This move, overseen by the country’s Bitcoin Office, reflects a continued commitment to digital currency despite recent shifts in legal tender laws and ongoing international scrutiny.

• El Salvador adds 7 more BTC to treasury, now at 6,173 BTC.
• Bitcoin adoption amidst economic reforms and IMF pressure.
• Plans for Volcano Bonds and Bitcoin City.

Since President Nayib Bukele’s election in 2019, El Salvador has been on a transformative journey. The country has seen a remarkable reduction in crime rates, achieved fiscal discipline with its debt-to-GDP ratio dropping from 95% in 2020 to 59% in 2024, and witnessed a 19% GDP growth between 2021 and 2023. This backdrop of economic progress has set the stage for bold initiatives like the adoption of bitcoin as legal tender in September 2021, though this law was repealed in January 2025 under pressure from the International Monetary Fund (IMF), making bitcoin payments voluntary.

Despite the repeal, El Salvador’s Bitcoin Office continues to manage the country’s bitcoin strategy, reflecting a broader vision of financial inclusion and economic growth. Critics, however, highlight the risks and uncertainties of this approach, pointing to the volatility of cryptocurrency markets and potential financial instability. Yet, the government’s vision extends beyond bitcoin, with ambitious plans for $1 billion Volcano Bonds and the development of Bitcoin City, powered by geothermal energy—think of it as harnessing the earth’s fiery soul for digital dreams. These initiatives aim to attract global investment and foster innovation, aligning with the country’s sustainable development goals.

El Salvador’s energy strategy focuses on renewable sources like geothermal energy—energy from the earth’s heat—to support high-tech industries. Additionally, President Bukele’s plans to leverage the country’s substantial untapped gold reserves add another layer of economic diversification. These multifaceted approaches to growth come amidst ongoing tension with the IMF, where El Salvador continues to defy conditions of a $1.4 billion loan agreement by maintaining its bitcoin purchases.

Industry leaders suggest that El Salvador’s national Bitcoin treasury strategy could serve as a blueprint for other nations considering similar moves. Matthew Sigel from VanEck notes the transformative impact of Bukele’s reforms on daily life, emphasizing the tangible benefits of reduced crime and economic growth that support the country’s broader strategy, including its bitcoin adoption. However, it’s not all sunshine and roses; the Chivo Wallet initiative aimed at promoting bitcoin use has seen limited success, with only 8% of Salvadorans using it for payments by 2024. Despite this, the government’s persistence in accumulating bitcoin defies the IMF’s pressures and reflects a long-term vision for the country’s economic future.

While El Salvador’s bitcoin strategy is seen as a pioneering effort, it’s important to address the elephant in the room: security risks. Holding large amounts of Bitcoin in national reserves could make the country a prime target for cyber attacks. Yet, the potential for setting a global precedent and driving financial inclusion remains a beacon of hope for many.

So, why is El Salvador going all in on bitcoin? It’s not just about the hype; it’s about reshaping the financial landscape and challenging the status quo. But with great power comes great responsibility—and great risks. As El Salvador continues to navigate these waters, the world watches with bated breath.

Key Questions and Takeaways

• What is the current total of bitcoins held by El Salvador?

  El Salvador currently holds 6,173 bitcoins.

• What is the role of the Bitcoin Office in El Salvador?

  The Bitcoin Office manages El Salvador’s bitcoin strategy and oversees the integration of bitcoin into the country’s economy.

• What are the potential benefits of El Salvador’s bitcoin adoption?

  The potential benefits include promoting financial inclusion and stimulating economic growth.

• What are the main criticisms of El Salvador’s bitcoin strategy?

  Critics argue that the adoption of bitcoin poses significant risks and uncertainties, including volatility and potential financial instability.

• How does El Salvador’s bitcoin strategy fit into the broader global context of cryptocurrency adoption?

  El Salvador’s strategy is a pioneering effort globally, serving as the first country to adopt bitcoin as legal tender and setting a precedent for others considering similar moves.