Loan at Risk as IMF Presses El Salvador on Bitcoin Buys

While the IMF insists that the government should stop using its Chivo wallet and freeze further Bitcoin acquisitions, President Nayib Bukele’s administration continues to defy these conditions. In fact, El Salvador bought 30 more BTC in May alone. Analysts speculate El Salvador could still comply with IMF terms by routing purchases through third parties. 

Meanwhile, Japanese firm Metaplanet is escalating its own Bitcoin strategy by raising $50 million via zero-interest bonds backed by Evo Fund to increase its holdings beyond 7,800 BTC. However, critics argue that investors are overvaluing firms like Metaplanet and Strategy, and suggest that direct Bitcoin purchases offer better value. Adding to Bitcoin’s mainstream momentum, Jack Dorsey's Block Inc. announced it will roll out Bitcoin payments via Square by 2026 using the Lightning Network, promising speed, lower fees, and greater merchant flexibility.

El Salvador Under IMF Scrutiny

The International Monetary Fund (IMF) announced on May 27 that it reached a staff-level agreement to disburse $120 million to El Salvador, contingent upon executive board approval. This payout follows an initial review of the $1.4 billion, 40-month loan agreement that was signed last year. 

However, the disbursement comes with certain conditions—particularly regarding El Salvador’s continued involvement with Bitcoin. The IMF explained that the government must cease operations related to the Chivo wallet by the end of July and must ensure that the amount of Bitcoin held across all government-owned wallets remains unchanged.

Despite these terms, El Salvador appears to be maintaining its pro-Bitcoin stance. Just hours after the IMF announcement, the country's Bitcoin Office posted on X that it had once again to its Bitcoin holdings. 

According to the official Bitcoin tracker, El Salvador acquired 30 BTC over the past 30 days, bringing its national Bitcoin reserve to 6,190.18 BTC. This persistent acquisition strategy is in line with President Nayib Bukele’s ongoing plan to purchase one Bitcoin per day.

The IMF reiterated earlier in March that El Salvador should halt Bitcoin accumulation and avoid launching new Bitcoin-related initiatives. Yet Bukele’s administration remains firm, and recently announced that the country's Bitcoin holdings are now at an unrealized profit of $386 million. This is a gain of 132% on the total investment. 

(Source: BitBo)

While the IMF continues to call for restraint, some analysts, including intergovernmental blockchain adviser Anndy Lian,proposed that El Salvador may still technically comply with IMF conditions by routing purchases through non-governmental entities. Meanwhile, IMF officials acknowledged that the country is currently in compliance with broader performance criteria, which only complicates the enforcement of Bitcoin-related conditions.

Metaplanet Ramps Up Bitcoin Holdings

El Salvador is not alone in its BItcoin accumulation mission. Japanese investment firm Metaplanet announced a $50 million private placement of zero-interest bonds to help expand its Bitcoin holdings. The May 28 announcement revealed that the bonds, issued in $1.25 million increments, will not offer investors any periodic interest payments. Instead, profits—if any—will be realized solely through the bond’s redemption value at maturity.

Part of Metaplanet’s announcement

The sole investor in this round is Evo Fund, a Cayman Islands-based investment firm that served as Metaplanet’s principal backer in its Bitcoin acquisition initiatives. Evo Fund consistently subscribed to previous rounds of Metaplanet’s zero-interest bonds and continues to support the firm’s crypto-focused capital deployment. The new bonds are unsecured and come with no guarantees or collateral, which implies that the level of trust between the two entities is quite impressive.  

Despite the size of the issuance, Metaplanet stated that the bonds are expected to have minimal impact on its 2025 financial results, though the company promised to disclose any relevant updates in the future. The decision to raise capital through this unconventional bond structure is part of a trend among firms seeking alternatives to fiat-based treasury strategies. Metaplanet's move also follows its second-largest Bitcoin purchase to date, where it acquired 1,004 BTC worth over $100 million, bringing its total holdings to 7,800 BTC valued at more than $800 million.

Metaplanet Bitcoin holdings (Source: BitcoinTreasuries.net)

The company’s aggressive accumulation strategy has greatly affected its market valuation. According to a report by 10x Research on May 27, Metaplanet’s stock is trading as if its Bitcoin holdings were worth five times their actual value. 

This fueled criticism from some financial circles, including veteran investor Jim Chanos, who argued at the Sohn Investment Conference in New York that investors are overpaying for Bitcoin exposure through companies like Metaplanet and Strategy. Chanos revealed that he is selling shares in these firms to buy Bitcoin directly, which suggests that direct exposure offers more accurate value and potentially higher returns than relying on corporate wrappers.

Square to Roll Out Bitcoin Payments by 2026

In other Bitcoin-related news, Jack Dorsey’s Block, Inc. is set to bring Bitcoin payments to Square, its popular merchant payment platform. The company unveiled the plan during the Bitcoin 2025 conference in Las Vegas on May 27, and showcased the feature at the BTC Inc. merchandise booth. 

Bitcoin payments will be facilitated using the Lightning Network, allowing for fast and low-cost transactions. The rollout is scheduled to begin in the second half of 2025, with full availability for all eligible Square sellers expected by 2026, pending regulatory clearance.

The new feature will allow merchants to accept Bitcoin payments using existing Square hardware, with the option to either hold the received BTC or have it automatically converted into fiat currency in real-time. Jack Dorsey shared the update on X, and specifically pointed out the flexibility this offers to merchants. This initiative builds on Square’s current Bitcoin Conversions feature, which lets sellers convert a portion of their earnings into Bitcoin.

According to Miles Suter, Block’s Bitcoin Product Lead, the goal is to give merchants more choice and economic empowerment when it comes to accepting payments. He described the integration as seamless for consumers, with payments made by simply scanning a QR code while Square and the Lightning Network handle the backend processing.

In tandem with the Square announcement, Block revealed it is also enhancing the privacy and security of its Bitkey self-custody wallet. Bitkey launched in late 2023, and is receiving updates to improve accessibility and eliminate the need for traditional seed phrases, making self-custody much more user-friendly for the broader public.

The benefits of Bitcoin payments were also pointed out by Dan Edwards, COO of the American fast food chain Stake n’ Shake. At the conference, Edwards said the company halved its payment processing fees since adopting Bitcoin as it it is faster than credit cards and significantly cheaper. Stake n’ Shake began accepting Bitcoin at all its global locations on May 16.