El Salvador Diversifies Reserves with Gold Purchase After Bitcoin Plans Paused Amid IMF Pressure

El Salvador Pivots to Gold Amid Shifting Monetary Policy

The Central Reserve Bank of El Salvador has announced the purchase of 13,999 ounces of gold, valued at $50 million USD, marking the first increase in its gold holdings since 1990. This decision follows a freeze on Bitcoin acquisition plans, signaling a strategic shift towards diversifying international reserves. According to the Central Bank, the gold reserves have increased from 44,106 ounces to 58,105 ounces, an estimated value of $207.4 million USD. This action is in response to guidance from the International Monetary Fund (IMF).

IMF Pressure Leads to Course Correction

The IMF has confirmed that El Salvador has halted Bitcoin purchases. A July assessment report stated that while on-chain data showed financial flows, these were internal wallet transfers and not new purchases. As a result, the country has not seen new government-backed Bitcoin acquisitions.

Rationale Behind Gold Purchase: Reserve Diversification and Stability

The Central Reserve Bank of El Salvador views the gold purchase as a long-term strategy to strengthen international reserves. Gold accounts for approximately 20% of global central bank reserve assets, second only to USD-denominated assets. Over the past three years, global central bank annual gold purchases have exceeded 1,000 tonnes on average.

Gold as a Global Strategic Asset

Gold is considered a global strategic asset that helps ensure the diversification and long-term security of the country's reserves. The Central Bank of El Salvador has confidence in gold, considering it a "global strategic asset," noting that the precious metal will help El Salvador consolidate long-term financial planning and protect its economy from international market shocks. The Bank believes that investing in gold can bring more stability to the people of El Salvador.

The Bitcoin Transition: A Closer Look

Since 2021, El Salvador had focused on increasing its Bitcoin holdings. However, an IMF report revealed that El Salvador has not made any new Bitcoin purchases since December of last year, which drew widespread opposition. Previously, the IMF had required the Central American country to stop buying cryptocurrencies after providing a $1.4 billion USD loan.

Current Bitcoin Holdings Data

According to Bitcoin Office data, El Salvador still holds approximately 6,244 Bitcoins, worth $742 million USD. At an average purchase price of $46,000 USD per coin, the treasury has realized gains of 127%. As of July 2025, the country's net international reserves totaled $4.7 billion USD, an increase from $3 billion USD in the previous year.

Legal Adjustments and Their Impact

In January 2025, minutes after President Bukele submitted a bill, the El Salvadoran parliament voted 55-2 to pass an amendment that eliminates the mandatory requirement for businesses to accept Bitcoin payments. These reforms align with the $1.4 billion USD loan agreement reached with the IMF, while maintaining Bitcoin's status as legal tender.

Bitcoin Reclassification and IMF Assessment

The IMF has expressed appreciation for these policy adjustments, considering that they reduce financial risks and increase transparency. After the mandatory status of Bitcoin was removed, the IMF further required El Salvador to classify cryptocurrency as a financial asset rather than as currency. Blockchain analysts have identified continuous daily transfers of one Bitcoin from exchanges such as Binance and Bitfinex to government-linked addresses, but the IMF has characterized these operations as technical accounting processing rather than new official purchases.

Privatization of Chivo Wallet

As a result of the recent reforms, the Chivo wallet, which served as a key tool for promoting Bitcoin, will be privatized and removed from government oversight. Officials said this move could ease pressure on public finances while maintaining service functionality under private operation.