El Salvador will shut down or sell its state-backed Bitcoin wallet, Chivo, as part of a $1.4 billion loan agreement with the International Monetary Fund (IMF). Despite this move, Bitcoin will remain legal tender in the country, and its broader Bitcoin policies will continue unchanged.
Stacy Herbert, director of El Salvador’s national Bitcoin office, confirmed that closing or divesting Chivo was a key requirement of the IMF loan. Launched in 2021, Chivo was a core part of President Nayib Bukele’s push to make El Salvador a global Bitcoin hub.
However, the wallet faced setbacks, including multiple hacking incidents, with a major breach in April 2024 exposing sensitive user data and leaking its source code.
Despite Chivo’s closure, El Salvador remains committed to Bitcoin. The country has invested over $270 million in BTC and holds more than $632 million worth of the cryptocurrency. With Bitcoin’s price recently surpassing $100,000, El Salvador has seen $362 million in unrealized profits, and the price surge even influenced the nation’s bond market—a first for sovereign debt.
El Salvador’s Bitcoin strategy has inspired other nations, with Brazil and the U.S. reportedly exploring Bitcoin reserve laws. While Chivo’s closure reflects a shift in strategy, the country’s pro-Bitcoin stance remains strong.
Image Credit: Pixabay
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