El Salvador president denies transferring govt’s bitcoin reserves to private operator

SAN SALVADOR, Sept 5 — El Salvador’s President Nayib Bukele denied on Friday transferring the country’s bitcoin reserves to a private operator as part of a loan agreement with the International Monetary Fund (IMF).

Bitcoin has been the most closely watched element of the agreement since Bukele signed up to the US$1.4 billion (RM5.9 billion) arrangement with the IMF.

El Salvador became the first country to make bitcoin a form of legal tender in 2021, introducing the cryptocurrency in circulation alongside the US dollar.

As part of the IMF negotiations, the government removed bitcoin as legal tender in January.

The IMF announced a preliminary deal with El Salvador on Thursday, unlocking US$140 million (RM590 million) in fresh funding as part of an austerity reform programme.

The decision came after the IMF determined El Salvador’s continued bitcoin purchases were financed by private donations rather than public money.

The IMF reported that “public participation in the Chivo wallet has been substantially unwound, and efforts are underway to enhance the transparency of Bitcoin holdings.”

“Majority ownership and operational control have been transferred to a private operator, while a minority stake and custodial responsibilities for customer assets have been retained by the government,” the organisation added in a statement.

Bukele said on X that “the only thing that was transferred were Chivo’s shares... and NOT the Strategic Bitcoin Reserve,” denying earlier media reports.

The IMF said “no further Bitcoin accumulation beyond the documented donations is expected.” — AFP