El Salvador has secured an immediate $138 million IMF disbursement after the lender completed two reviews of its $1.4 billion program and granted waivers for missed conditions, including one tied to Bitcoin accumulation. According to the IMF, the Executive Board completed the second and third reviews on October 1, releasing SDR 101.96 million worth approximately $138 million at the Fund's stated conversion rate. The board found that several performance criteria had not been met, including the condition covering Bitcoin accumulation, but waivers were granted after what the IMF described as corrective measures and renewed commitments from Salvadoran authorities. Dan Katz, the IMF's First Deputy Managing Director, stated that the residual public-sector involvement in Chivo should be 'fully unwound' and linked the Chivo transfer to the broader retreat from direct state participation.
The IMF waived El Salvador's breach of Bitcoin accumulation limits after documentation supplied by El Salvador showed the accumulation came from private donations with no public resources used directly. The original IMF program placed a continuous restriction on voluntary Bitcoin accumulation by the public sector, but by September, the IMF and Salvadoran authorities reached an agreement over Bitcoin that had appeared in government-controlled wallets since the first review. The IMF accepted documentation tracing those additions to donations, though donor identities and individual donation amounts were not made public. The October 1 board decision does not authorize a return to government-funded Bitcoin purchases, with the IMF stating 'no further Bitcoin accumulation is expected beyond documented donations' under the current lending program commitments. Katz described the transfer of majority ownership and control of Chivo to a private operator as a welcome step, stating that no further El Salvador Bitcoin accumulation is expected beyond documented donations.
The IMF has confirmed that majority ownership and operational control of Chivo had moved to a private operator in September, with the government retaining only a minority stake and custodial responsibilities for customer assets. Dan Katz, the IMF's First Deputy Managing Director, stated that the residual public-sector involvement should be 'fully unwound' as part of the program requirements. El Salvador had already changed its Bitcoin Law in 2025, ending mandatory Bitcoin acceptance for private businesses and requiring taxes to be paid in U.S. dollars. The changes formed part of the measures underpinning the IMF program, with negotiations over Chivo continuing into 2026.
The IMF projects El Salvador's economy will grow 4.5% in 2026 after an estimated 3.9% expansion in 2025, with growth forecast at 4% in 2027. Gross international reserves are projected at $5.346 billion in 2026 and $6.17 billion in 2027, while the primary fiscal balance is forecast at a surplus of 2.9% of GDP this year and 3.7% next year. The Fund attributed the stronger activity to investment and private consumption, alongside remittances, tourism and capital inflows, citing improved security and investor confidence among the supporting factors. However, the IMF still wants El Salvador to continue its fiscal reforms, calling for tighter expenditure controls, improved revenue administration and stronger public financial management.
El Salvador is backing a government app called Sivar that allows citizens to send and hold digital dollars through stablecoins rather than Bitcoin. According to reports from Bloomberg, the app is built by Modveon, a Palo Alto startup, and runs on Base, a blockchain network developed by US exchange Coinbase. The app requires government ID verification and places users in local groups based on their home address, enabling them to send money, post content, and participate in live polls. Modveon CEO Nana Murugesan confirmed that El Salvador represents the firm's first national deployment, with the contract carrying a multimillion-dollar fee that was not disclosed. A photograph circulated from the 'First Sivar Community Gathering' in San Salvador on August 24 documents Modveon's presence in the country.
