El Salvador bought another 21 BTC on Sunday during the country’s Bitcoin Day. The purchase brings its total Bitcoin holdings to 6,313.18 BTC, worth around $702 million.
The nation’s President, Nayib Bukele, said the initiative came as the country marks the fourth anniversary of its Bitcoin legal tender law. He also said the purchase symbolized Bitcoin’s 21 million coin supply as the El Salvador Bitcoin Office continues its reserve-building strategy.
El Salvador defies IMF agreement on halting voluntary BTC accumulation
According to data from the Bitcoin Office, the country has added roughly 28 BTC in the last 7 days and over 50 BTC in the last 30 days. On–chain data also shows that the smallest country in mainland Central America has roughly purchased 1 BTC per day since March 2024.
Bukele introduced the Bitcoin Law in 2021 to make the country the world’s first nation to adopt BTC as legal tender alongside the U.S. dollar. Critics like co-founder and vice chairman of Blockchain.com, Nicolas Cary, disapproved of the President’s approach to the digital asset due to how the program is rolled out in the country in terms of being top-down.
Cary said during the Token 2049 conference in London that El Salvador did not maintain the main ethos of crypto, where there’s really grassroots adoption and people are doing it voluntarily. He also implied that the El Salvadoran model is setting an example that other countries will follow in the future, despite criticizing the government’s methods.
El Salvador’s latest Bitcoin purchase also seems to deviate from its $1.4 billion IMF loan agreement in December last year. According to the deal, the fund required public entities to halt voluntary accumulation of the digital asset. The fund’s officials also acknowledged that the nation had agreed to freeze acquisitions under the finalized Extended Fund Facility.
Under the agreement, the Central American country revised its Bitcoin Law to make merchant acceptance voluntary, while maintaining the virtual asset as legal tender. El Salvador was also mandated to liquidate its Fidebitcoin trust and exit from the Chivo wallet program.
El Salvador has continued to purchase BTC despite the amendments to its deal with the IMF. The government will also be under scrutiny from the institution since future disbursements under the IMF program depend on compliance reviews through 2027.
The IMF said in July that authorities are complying with commitments not to accumulate Bitcoin voluntarily. According to a report, the fund’s spokesperson claimed that El Salvador was not purchasing Bitcoin on a weekly basis but was instead moving funds around from internal wallets. The spokesperson noted that the total amount of BTC held across government-owned wallets at the time remained unchanged.
El Salvador splits its Bitcoin treasury into multiple wallets
In August, the country redistributed its holdings across multiple addresses, with a cap of 500 BTC per address. The National Bitcoin Office revealed that the initiative was part of a strategic move to enhance the security of its National Strategic Bitcoin Reserve.
The agency also cited security threats, such as the advent of quantum computing, as the main reason for redistributing its digital assets. The Bitcoin Office believes quantum computing could break public-private key cryptography using Shor’s algorithm.
The agency stated that the transparency of public keys in Bitcoin transactions exposes the country’s BTC address to quantum attacks that could redirect funds before the transaction is confirmed. The Bitcoin Office hopes that splitting the country’s BTC holdings into smaller accounts could minimize the impact of a potential quantum attack.
The IMF estimated in March that El Salvador’s Bitcoin purchases reached roughly $300 million and had generated more than $400 million in unrealized gains at current prices. The fund also claimed that unlimited disclosures of the country’s crypto reserves prevent a full independent assessment of its portfolio.
El Salvador’s Bitcoin office Declares That “Bitcoin Banks Are Coming”
El Salvador announced plans for the world’s first Bitcoin Bank, signaling another step in its crypto-focused financial strategy. The country’s Bitcoin Office posted an image on X, captioned, “Bitcoin Banks are coming to Bitcoin Country.” However, the announcement left many details unclear, sparking speculation about its scope and timing.
