Mysteries Persist in El Salvador Regarding Bitcoin

The question of where the Salvadoran government obtains money to purchase new Bitcoin is one being asked by some following its most recent acquisition of the digital asset.

In statements on the radio program La Tribu, economist Carlos Acevedo, a former president of the Central Reserve Bank (BCR), praised President Nayib Bukele's futuristic bet on adopting the asset as a monetary alternative for the country. However, he also raised the question regarding the origin of the funds.

He opined that there is a lack of transparency, as the government does not disclose where it buys Bitcoin or which funds it uses to continue accumulating the token, despite a tacit agreement with the International Monetary Fund (IMF) to not accumulate more digital assets. The Salvadoran government had a futuristic strategy in purchasing the cryptocurrency, and now, significant money moves around the "virtual currency," he estimated.

"The world's largest banks have a portion of their portfolios in Bitcoin; it has a status it didn't have before. In that sense, the Government's bet was futuristic," he asserted.

Acevedo criticized the IMF as being "lax" for not demanding more from the Salvadoran government regarding its use of public resources for such a volatile investment.

Despite the asset's decline in recent weeks, when it fell below $90,000, the economist expressed no doubt that it will recover, especially since 99 percent of the coins have already been "mined," signaling the approaching emission limit. Considering this, he deemed that "the purchase" made by the government is justified, as sooner or later that cryptocurrency will increase in value.

Acevedo pointed directly at the doubt, stating that if the Ministry of Finance were disbursing money for the government to buy Bitcoin, the IMF would report that "that cannot be done." "Without a doubt," he opined, "the government knows where it took the funds from, and the IMF should know."

Scrutiny and Market Volatility

A recent online poll and warnings from the IMF have recently brought the Bukele government's Bitcoin policy into sharp focus. Eighty-three percent of respondents opposed continuing to purchase the digital asset, versus 17 percent who favored it.

After surpassing $126,000 in October, Bitcoin plummeted drastically, erasing projected gains for 2025. This sharp pullback from all-time highs comes in a year that was supposed to consolidate its legitimacy, according to a Bloomberg report.

Following El Salvador's signing of an extended fund facility agreement with the IMF in January, analysts expected Bitcoin purchases to diminish. However, they continue, raising alarms about whether this will affect the loan that is already being disbursed.

Today, questions are growing about the source of the funds used to acquire Bitcoin and whether the accumulated profits belong to the state or to sectors outside the government. Doubts persist.