El Salvador to discontinue Bitcoin wallet Chivo in $1.4b IMF deal

El Salvador’s deal with the IMF could end state-backed Bitcoin wallet Chivo, but not its overall support for BTC.

Bitcoin-friendly country El Salvador will delist or sell its Chivo crypto wallet as it cuts Bitcoin (BTC) activity within the framework of the conditions aimed at obtaining an International Monetary Fund of 1.4 billion dollars ready.

Stacy Herbert, Director of El Salvador’s National Bitcoin Office, said the decision was part of its agreement with the IMF. Notably, Chivo’s fate will not impact BTC laws in the country, and Bitcoin will remain available as legal tender. below the IMF agreement according to Reuters.

El Salvador introduced Chivo in August 2021, around the same time it legalized Bitcoin nationwide. Chivo served as a sovereign crypto wallet to power President Bukele’s ambitious BTC agenda.

Citizens received BTC rewards for registering with Chivo back then, but the crypto wallet suffered several setbacks. Pirates have attacked Chivo on at least two occasions, expose sensitive user data and leak the wallet code in April 2024.

El Salvador’s Bitcoin bet

Despite the likely closure of Chivo, El Salvador remains a pro-BTC powerhouse. Under President Bukele, the country became the first jurisdiction to adopt BTC as legal tender and deploy public funds for Bitcoin purchases.

Since September 2021, when he legalized BTC, President Bukele has overseen a $270 million investment in the trillion-dollar asset.

At the time of publication, El Salvador held over $632 million in BTC, with $362 million in unrealized profits from its Bitcoin bet. BTC exceeds $100,000 triggered growth of El Salvador’s bond markets, a historic moment in crypto history. This was the first time that BTC price trends had an impact on government-issued debt.

Other countries such as Brazil and the United States have now announcement plans to explore Bitcoin reserve laws, following crypto skepticism in subsequent years.