The International Monetary Fund (IMF) announced that it had reached an agreement with El Salvador that could unlock a $140 million loan disbursement, after securing commitments related to Bitcoin. In September 2021, El Salvador became the first country in the world to adopt Bitcoin as legal tender alongside the U.S. dollar.

Concerned about the risks that the cryptocurrency’s extreme volatility posed to public finances, the IMF secured changes in January 2025 that stripped Bitcoin of its status as mandatory legal tender. The change was a condition for the Salvadoran government to receive $1.4 billion in loans over 40 months under an agreement reached in December 2024.

As part of that program, the IMF reached a preliminary agreement to release a $140 million tranche following the “second and third reviews,” the institution said Thursday. “Ownership and operational control of the government’s electronic wallet have been transferred to a private operator, and no public resources have been used to accumulate Bitcoin,” the IMF noted.

The organization also said the country’s economy is showing “strong performance,” with growth exceeding forecasts last year and expected to reach 4.5% in 2026. Investment, consumer spending, remittances, tourism and capital inflows are all rising, according to the IMF, which attributed the improvement to better security and renewed investor confidence.

The release of the $140 million tranche must still receive formal approval from the IMF Executive Board, the organization said. President Nayib Bukele, who took office in 2019, has reduced crime and brought the homicide rate to a historic low by imprisoning large numbers of suspected gang members.

Under the December 2024 agreement with the IMF, his government also implemented a drastic austerity plan. Economists estimate that approximately 15,000 public employees have been dismissed in the country of 6 million people. Labor unions estimate that a total of 47,000 jobs have been eliminated since Bukele took office.

Around 30% of Salvadorans live in poverty, and it continues to have one of the lowest economic growth rates in Central America.