El Salvador has reignited the debate around its bitcoin policy. The government announced that it bought 1,090 bitcoins worth about 100 million dollars – allegedly the largest single purchase in the country’s history. The transaction reportedly took place at 6:01 p.m. ET, when the bitcoin price briefly dipped below 90,000 dollars. The government traditionally uses similar dips to buy.

With this move, the country increased its holdings to 7,474 BTC, roughly 676 million dollars. President Nayib Bukele has been claiming for more than two years that the nation buys one bitcoin per day and builds a state reserve. He again shared a screenshot confirming the purchase, adding that “buying doesn’t stop.”

IMF rules forbid buying bitcoin. So where did the new BTC come from?

The situation is not straightforward. El Salvador has a 1.4-billion-dollar loan agreement with the International Monetary Fund, which explicitly states that the public sector is not allowed to buy bitcoin.

In July, the country’s own finance ministers said that El Salvador had not purchased any new bitcoins since February. That directly contradicts statements from President Bukele and the Bitcoin Office.

IMF therefore noted that the growth in state-held BTC could only come from transfers between government-controlled wallets, not from new market purchases. In other words, the country may simply be reshuffling existing reserves.

Government insists: we keep buying

Stacy Herbert, head of the Bitcoin Office, maintains that the country is still buying bitcoin, despite IMF restrictions. In March, she even wrote that some fans “trust the IMF more than the data stored directly on the Bitcoin Blockchain.”

What is actually true remains unclear. If El Salvador indeed bought new bitcoins on the market, it would be one of the largest state-level cryptocurrency purchases ever. If the move was only an internal wallet transfer, the market impact is zero.

Sources:

https://x.com/nayibbukele/status/1990571996732965357

https://x.com/nayibbukele/status/1897019629702410551

https://x.com/stacyherbert/status/1897063744733384942

https://www.theblock.co/post/379176/el-salvador-100-million-bitcoin-purchase