The International Monetary Fund (IMF) has acknowledged progress in El Salvador's Bitcoin strategy, noting that expected risks associated with the cryptocurrency have not yet materialized.

An IMF mission emphasized the importance of supporting El Salvador's medium-term growth through policies aimed at reducing fiscal and financial stability risks linked to Bitcoin.

The IMF highlighted potential policies aimed at strengthening public finances, enhancing bank reserves, and improving governance and transparency in relation to Bitcoin investments.

Preliminary understandings have been reached to improve El Salvador's primary balance to approximately 3.5% of GDP over the next three years.

To enhance its reserve buffers, El Salvador plans to reduce domestic financing while seeking support from the IMF and other development banks.

On August 6, 2024, IMF team leader Raphael Espinoza reported advancements in discussions with El Salvador regarding financial support programs.

The IMF is working to develop an agreement with Salvadoran authorities on fiscal policies that ensure long-term stability and prosperity.

Max Keiser, an adviser to President Nayib Bukele, stated that Bitcoin has positively impacted El Salvador's sovereign bonds and predicted that the new Bitcoin Bank Law could attract $100 billion in private capital.

El Salvador has been actively increasing its Bitcoin holdings, currently owning over 5,800 BTC valued at approximately $332 million.

President Nayib Bukele has made Bitcoin legal tender in El Salvador and is promoting the development of 'Bitcoin City,' a tax-free crypto haven powered by geothermal energy.

Key issues in the discussions with the IMF include El Salvador's use of cryptocurrency, specifically Bitcoin, and its fiscal implications.

Discussions with the IMF have included enhancing public finances, increasing bank reserves, and improving governance and transparency related to Bitcoin investments.