The IMF did not kill Bitcoin

Original Author: Daniel Batten

Original Compilation: Luffy, Foresight News

In recent years, the International Monetary Fund (IMF) has been weaving a web to curb the development of Bitcoin through a series of initiatives:

• Successfully forced El Salvador to abandon Bitcoin as legal tender and rescind some other Bitcoin policies

• Successfully pressured the Central African Republic to repeal its Bitcoin bill in 2023 through regional banking institutions

• Resulted in Argentine President Milei's Bitcoin promises during his campaign failing to translate into actual actions

• Expressed "serious concerns" over Pakistan's Bitcoin plans

• In loan negotiations, cryptocurrencies are consistently viewed as "risks"

Here is a summary table:

As we can see, the only countries able to resist IMF pressure are El Salvador (before 2025) and Bhutan, which have not received IMF loans. Every country that has accepted IMF loans and attempted to adopt Bitcoin at the national level has been successfully thwarted or largely defeated by the IMF.

Why has the IMF been so successful in preventing global countries from adopting Bitcoin (except Bhutan)? And why is it so proactive?

In this detailed report, we will delve into three countries where the IMF has successfully resisted Bitcoin adoption and point out how it may achieve the same result in Pakistan. In the final part of this report, we explore five concerns the IMF has regarding Bitcoin, and how, despite various nation-states abandoning or partially abandoning Bitcoin from the top down, Bitcoin continues to thrive at the grassroots level.

1. Central African Republic: When Colonial Currency Meets Digital Hope

The Central African Republic (CAR) uses the Central African CFA franc. The CFA is not just a currency, but a geopolitical chain backed by France and managed by the Central Bank of Central African States (BEAC). Among its 14 member countries, 6 Central African nations (including CAR) are still required to keep 50% of their foreign exchange reserves in Paris.

This control over foreign exchange reserves has fostered economic dependency while establishing a preferential export market for French goods. For example, in 1994, under pressure from the West (especially the IMF), the CFA was devalued by 50%, leading to soaring import costs, allowing exporters (mainly from the EU) to acquire resources from CFA countries at half price. Locally, the impact was devastating, leading to widespread wage freezes, layoffs, and massive social unrest.

When the Central African Republic announced its adoption of Bitcoin as legal tender in 2022, BEAC and its regulatory body, the Central African Republic Commercial Advisory Board, immediately declared the law invalid, citing violations of the treaty establishing the Central African Economic and Monetary Community. This was not bureaucratic red tape, but a warning from the guardians of the "Francafrique" currency.

Why is this important? To this day, the Central African Republic's economy is heavily reliant on IMF assistance, with its $1.7 billion external debt (61% of GDP) meaning that defying BEAC risks financial isolation.

The IMF's Quiet Actions

The IMF acted swiftly. On May 4, 2022, within two weeks, the IMF publicly condemned the Central African Republic's "dangerous experiment," claiming it contradicted the legal framework of the Central African Economic and Monetary Community's crypto ban. The IMF stated that this move posed "significant legal, transparency, and economic policy challenges," similar to previous concerns regarding El Salvador's adoption of Bitcoin: risks to financial stability, consumer protection, and fiscal liabilities (notably, these risks did not materialize in El Salvador).

But their real weapon is leverage. As the largest creditor of the Central African Republic, the IMF tied a new $191 million medium-term credit arrangement to policy compliance.

Timeline Revealed

The table below traces the IMF's behind-the-scenes actions:

The key to undermining the Central African Republic's Bitcoin ambitions was ensuring the Sango project (a blockchain initiative launched by the Central African Republic government aimed at selling "electronic residency" and citizenship for $60,000 in Bitcoin) would not proceed.

Sango Project: Coincidence or Collusion?

In July 2022, the Central African Republic launched the Sango project, aiming to raise $2.5 billion, equivalent to the country's annual GDP.

The Sango project failed to succeed. By January 2023, it had raised only $2 million (0.2% of the target). The IMF reported that the failure was due to "technical barriers with an internet penetration rate of only 10%," but our analysis reached a starkly different conclusion. Two factors destroyed the Sango project:

• Investor exodus

• A ruling from the Central African Republic's Supreme Court blocking the Sango project

However, upon closer examination, both factors suggest IMF involvement.

Investor Flight

The IMF's role in this process was indirect but compelling.

• On May 4, 2022, the IMF expressed concerns about the Central African Republic's adoption of Bitcoin, stating it posed significant legal, transparency, and economic policy challenges. This statement was made before the launch of the Sango project, emphasizing risks to financial stability and regional economic integration, which may have deterred investors.

• In July 2022, during a staff visit to oversee the program review, the IMF noted "economic downturn due to rising food and fuel prices," which may have exacerbated investor caution.

• Reports also indicated that the IMF and the Central African Republic Commercial Advisory Board warned of inherent risks in the Central African Republic's crypto initiatives, further heightening concerns.

The timing of these IMF statements coincided with observed investor flight, indicating that its cautious stance as an authoritative financial institution may have influenced market perceptions.

Supreme Court Ruling

On the surface, the Supreme Court ruling appears to be an independent event, but a deeper investigation raises doubts about the independence of the Central African Republic's judicial system—the country's corruption perception index ranks 149 out of 180 (extremely low).

As previously mentioned, one week after the Central African Republic announced its Bitcoin strategy, on May 4, 2022, the IMF expressed "concerns," including risks to financial stability, transparency, anti-money laundering efforts, and macroeconomic policy management challenges due to volatility.

117 days later, on August 29, 2022, the CAR Supreme Court ruled the Sango project illegal. Transparency International (such as Gan Integrity) stated that the Supreme Court, part of the Central African Republic's judicial system, is one of the most corrupt institutions in the country, plagued by inefficiency, political interference, and potential bribery or political pressure.

The collapse of the Sango project became the IMF's "Exhibit A": "proving that Bitcoin cannot operate in fragile economies." But the reality is that the IMF's continued expression of "concerns" preemptively undermined the project environment, making this conclusion possible.

5,200 miles away, in the small country of Bhutan, we see a starkly different picture: Bitcoin has successfully taken root without IMF "involvement."

An Obvious Conclusion: Bitcoin's Resilience Transcends Borders

The reversal in the Central African Republic is not about the viability of Bitcoin, but about power. The IMF used regional banking alliances to cut off the Central African Republic's capital sources and leveraged the $191 million loan to eliminate the threat to financial sovereignty. When the Sango project faltered, the trap suddenly closed.

However, this failure also revealed Bitcoin's enduring strength. Note what the IMF has failed to destroy:

• Bitcoin remittances in Nigeria continue to bypass dollar channels, saving millions in fees

• Bitcoin trading in Kenya thrives without IMF approval

• El Salvador continues to accumulate Bitcoin despite mentioning it 221 times in loan conditions

The pattern is clear: where grassroots adoption takes root, Bitcoin can survive. But for countries that announce top-down Bitcoin plans while burdened with significant IMF loans, all have faced overwhelming resistance: El Salvador, Central Africa, Argentina, and now Pakistan.

The Central African Republic's outstanding $115.1 million IMF loan balance subjects it to IMF pressure. In countries like Bhutan, which have no IMF loans, Bitcoin slips through the IMF's fingers. Every peer-to-peer payment, every Lightning Network transaction, erodes the foundations of the old system.

The IMF won this round in the Central African Republic, but the struggle for global financial sovereignty has only just begun.

2. Argentina's $45 Billion Bitcoin Adoption Barrier

If the Central African Republic's Bitcoin plans were thwarted, Argentina never even got off the ground. President Milei's pre-election remarks hinted at significant actions, but ultimately there was no progress. Was this just empty talk from politicians during an election, or was there more to it? This section will uncover the truth behind the failure of Argentina's Bitcoin plans.

Understanding the progress of Bitcoin adoption is like assessing whether a rocket can reach escape velocity: we must examine both thrust and resistance.

I am an optimist: I believe Bitcoin will win because it is clearly a better solution to our currently broken fiat currency system. But I am also a realist: I think most people underestimate the power of conservative forces opposing Bitcoin.

When I ran a tech company, we faced the same situation. Our technology was ten times better than traditional systems, faster and more cost-effective, but they were not going to give up their existing monopolies easily.

What Happened in Argentina?

When liberal Javier Milei was elected President of Argentina in November 2023, many Bitcoin advocates cheered. This leader called central bank officials "frauds," vowed to abolish the Argentine central bank, and praised Bitcoin as "a natural response to central bank frauds." This case became a litmus test for whether Bitcoin could gain mainstream acceptance through government adoption rather than grassroots growth.

But 18 months into his presidency, Milei's Bitcoin vision has yet to materialize. Why? The IMF's $45 billion funding controls the country's Bitcoin development.

The IMF's Veto Power in Argentina

Restrictions were already in place when Milei was elected. On March 3, 2022, the previous Argentine government signed a $45 billion IMF bailout agreement. In the following weeks, details revealed that the agreement contained an unusual clause: requiring "to prevent the use of cryptocurrencies." This was not a suggestion but a loan condition recorded in the IMF's letter of intent, which mentioned concerns about "financial disintermediation."

Direct impacts:

• The Argentine central bank prohibited financial institutions from engaging in cryptocurrency transactions

• Despite Milei's pro-Bitcoin rhetoric, this policy was still enforced during his tenure

Milei's Shift

After taking office, Milei:

• Reduced the monthly inflation rate from 25% to below 5% (by May 2024)

• Lifted currency controls (by April 2025)

• Secured a new $20 billion IMF agreement (by April 2025)

But the core proposal in his declaration (Bitcoin adoption and abolishing the central bank) was conspicuously absent. The reason is simple: Argentina owes more to the IMF than any other country, giving the IMF unparalleled leverage.

However, the case of Argentina is ironic: despite the IMF preventing official Bitcoin adoption, Argentinians are still embracing Bitcoin. From 2023 to 2024, cryptocurrency holdings in South America grew by 116.5%, with Argentina having the highest rate in the region at 18.9%, nearly three times the global average. Moreover, this proportion has surged due to citizens hedging against a high annual inflation rate of 47.3% (by April 2025). This is a quiet rebellion that the IMF cannot control.

What Happens Next?

All eyes are on the midterm elections in October 2025. If Milei gains support, he may challenge the IMF's red lines. But for now, the lesson is clear: when a country borrows from the IMF, its monetary sovereignty is constrained.

Key Points

• The IMF's 2022 loan explicitly linked Argentina's bailout to anti-crypto policies

• Milei prioritizes economic stability over Bitcoin advocacy to gain IMF support

• Similarities exist between El Salvador, Central Africa, and now Pakistan, revealing the IMF's consistent strategy

• Argentinians are circumventing restrictions through grassroots Bitcoin adoption

3. El Salvador: A Partial Victory for the IMF

When El Salvador made Bitcoin legal tender in 2021, it was not just the adoption of a cryptocurrency but a declaration of financial independence. President Nayib Bukele viewed it as a symbol of resistance against dollar dominance and a lifeline for the unbanked. Three years later, this resistance encountered a $1.4 billion barrier: the IMF.

The Cost of Bailouts

To secure a loan in 2024, El Salvador agreed to abolish key pillars of its Bitcoin policy:

• Voluntary acceptance: Businesses are no longer required to accept Bitcoin

• Public sector ban: Government entities are prohibited from conducting Bitcoin transactions or issuing debt, including a ban on tokenized instruments linked to Bitcoin

• Bitcoin accumulation freeze: All government purchases are halted (the 6,000+ BTC reserve is now frozen), and a comprehensive audit of holdings must be conducted by March 2025

• Trust fund liquidation: Fidebitcoin (conversion fund) will be dissolved under the premise of audit transparency.

• Gradual phasing out of the Chivo wallet: Investigations show that most users converted BTC to USD, and the $30 incentive program will be gradually ended.

• Tax rollback: The dollar becomes the sole option for taxation, eliminating Bitcoin's utility as a sovereign payment.

Bukele's Strategic Retreat

El Salvador's compromises have fiscal implications:

• As bond repayments approach, the loan stabilizes the debt (84% of GDP)

• Dollarization remains unchanged (the dollar is still the primary currency)

But considering Bukele's statements in 2021, this retreat is shocking. The low usage rate of the Chivo wallet may have driven his concessions.

What Remains of the Experiment?

The IMF did not kill El Salvador's Bitcoin; it merely stifled official adoption. Grassroots usage continues:

• Bitcoin Beach remains operational and, in fact, is thriving

• The tourism sector attracts an increasing number of Bitcoin enthusiasts

But without national support, at least in the short term, Bitcoin's role may shrink to that of a niche tool rather than a monetary revolution.

The Path Ahead

El Salvador's future with Bitcoin could unfold in two scenarios:

• Slow fade: As IMF conditions fully take effect, Bitcoin becomes a curiosity for tourists

• Shadow revival: The private sector maintains its existence in the face of government retreat

One thing is clear: when the IMF writes a check, it also sets the rules.

Key Points

• IMF loans forced El Salvador to reverse six key Bitcoin policies

• Set a precedent for other countries seeking IMF support

• Grassroots Bitcoin usage may prove more enduring than government involvement

El Salvador has made many concessions on the Bitcoin issue. While it can be argued that this does not significantly harm El Salvador, it sends a strong signal to other Latin American countries (like Ecuador and Guatemala) that have been observing El Salvador and considering replicating its strategy (until they verify their own scale of IMF loans). Therefore, overall, this is a partial victory for the IMF and a partial victory for El Salvador.

4. Bhutan: A Success Story of Breaking Free from IMF Constraints

Bhutan's Bitcoin experiment has been underway for two years, meaning we now have some reliable data on how it impacts the economy.

The IMF warns that countries embracing Bitcoin will undermine economic stability, reduce efficiency in attracting foreign direct investment, and jeopardize decarbonization and environmental initiatives. It specifically expressed concerns about the "lack of transparency" in Bhutan's crypto adoption.

What Does the Data Say?

• Bitcoin reserves directly meet urgent fiscal needs. "In June 2023, Bhutan allocated $72 million from its Bitcoin holdings to raise civil servant salaries by 50%."

• Bhutan was able to "use Bitcoin reserves to avert crises as foreign exchange reserves dwindled to $689 million."

• Prime Minister Tshering Tobgay stated in an interview that Bitcoin also "supports free healthcare and environmental projects."

• Tobgay also mentioned that their Bitcoin reserves help "stabilize the country's $3.5 billion economy."

• Independent analysts noted, "This model can attract foreign investment, especially for countries with untapped renewable resources."

Given that the IMF's analysis is not only incorrect but almost entirely reversed, this raises the question: Are the IMF's predictions based on data?

5. Five Reasons the IMF May Worry About Bitcoin

"Get all your friends, liberals, Democrats, Republicans, everyone to buy Bitcoin—then it will democratize." John Perkins said at the 2025 Bitcoin conference

What if the IMF's biggest fear is not inflation… but Bitcoin? Can Bitcoin break the debt control of the IMF/World Bank?

In my recent conversation with John Perkins (author of "Confessions of an Economic Hitman"), some things became clear. Alex Gladstein had previously sharply exposed that the IMF's "structural adjustments" did not eliminate poverty but rather enriched creditor nations. Perkins supplemented this with his own firsthand accounts.

Perkins revealed to me how the Global South fell into a debt cycle: a design aimed at funneling wealth to the West. But the turning point is that Bitcoin has already disrupted this script in five key ways.

1) Lowering Remittance Costs to Loosen the Debt Shackles

Chris Collins's sculpture depicts the debt noose

Remittances (money sent home by migrant workers) often constitute a significant portion of GDP in developing countries. Traditional intermediaries like Western Union charge fees as high as 5-10%, which amounts to a hidden tax. For countries like El Salvador or Nigeria, central banks must hold dollars to stabilize their currencies, and these dollar reserves are often provided by the IMF.

Bitcoin Changes the Game

With the Lightning Network, transaction fees are nearly zero and arrive in seconds. In 2021, El Salvador's President Bukele optimistically predicted that Bitcoin could save $400 million in remittance fees. However, the reality is that there is almost no evidence that remittance fees using Bitcoin have approached this threshold. Yet, its potential is evident: more Bitcoin remittances will lead to higher dollar reserves, thereby reducing the need for IMF loans.

No wonder the IMF mentioned Bitcoin 221 times in the loan conditions for El Salvador in 2025; they want to maintain their relevance as a lending institution.

Bitcoin not only makes remittances cheaper but also completely bypasses the dollar system. In Nigeria, where the naira is weak, households now hold Bitcoin as a harder asset than the local currency. No need for the central bank to deplete dollar reserves, no need for IMF bailouts.

The numbers speak for themselves:

• Pakistan loses $1.8 billion annually due to remittance fees, and Bitcoin could save most of that

• El Salvador has saved over $4 million annually with just 1.1% of remittances in Bitcoin

Currently, Bitcoin's application is not fully covered. Only 12% of Salvadorans regularly use Bitcoin, while over 5% of remittances in Nigeria are conducted through cryptocurrency. But the trend is evident: every Bitcoin transaction weakens the cycle of debt dependency.

The IMF sees the threat. The question is: how quickly will this silent revolution spread?

In 2024, Nigeria's total remittances approached $21 billion, accounting for over 4% of GDP

2) Evading Sanctions and Trade Barriers

Oil-rich Iran, Venezuela, and Russia have been restricted from accessing dollars due to U.S. sanctions in 1979, 2017, and 2022, respectively, leading to significant reductions in oil exports.

Whether we agree with these countries' ideologies or not, Bitcoin has broken this cycle. Iran has been using Bitcoin to "export oil" to evade sanctions, while Venezuela has used Bitcoin to pay for imports, circumventing sanctions.

Iran has also mined Bitcoin by monetizing energy exports, avoiding the IMF's "reform for cash" ultimatum while keeping its economy running. With Russia and Iran leading the way in Bitcoin oil trading, the control of petrodollars is weakening.

Another country using Bitcoin to avoid sanctions-induced economic hardship is Afghanistan, which conducts humanitarian aid through Bitcoin. NGOs like "Incentive Code" have bypassed the Taliban's bank freezes, and the "Digital Citizen Fund" has used Bitcoin to provide aid after the Taliban takeover, preventing some families from starving.

Afghanistan's "Incentive Code" NGO uses Bitcoin donations that the Taliban cannot intercept to train women in software development

Although Bitcoin's share in sanctioned trade is small, accounting for less than 2% of oil exports in Iran and Venezuela, the trend is growing.

Sanctions are a key tool of geopolitical leverage, often supported by the IMF and World Bank as they align with major economies like the U.S. Countries under sanctions using Bitcoin reduce the IMF's control over capital flows while threatening the dollar's dominance.

3) Using Bitcoin as a National Inflation Shield

When countries like Argentina face hyperinflation, they borrow dollars from the IMF to support foreign exchange reserves and stabilize their currencies, but once they cannot repay, they ultimately face austerity measures or are forced to sell strategic assets at low prices. Bitcoin offers an escape route, serving as a global, non-inflationary currency that is not government-regulated and can appreciate.

El Salvador's experiment shows that Bitcoin can reduce dollar dependency. By holding Bitcoin, countries can hedge against currency collapse without needing IMF loans. If Argentina had allocated 1% of its reserves to Bitcoin in 2018, it could have offset over 90% of the peso's depreciation that year, avoiding IMF assistance. Bitcoin's neutrality also means no single entity can impose conditions, unlike the IMF's loan requirements for privatization or unpopular reforms. In encouraging Bitcoin adoption, it has neither debt leverage nor the IMF's long history to draw from. However, due to the Lindy effect (see below), Bitcoin becomes a more viable alternative every year.

Lindy Effect: The longer something succeeds, the more likely it is to continue succeeding

4) Bitcoin Mining: Turning Energy into Debt-Free Wealth

Many developing countries are energy-rich but heavily indebted, trapped in the IMF's loans for infrastructure like dams or power plants. When defaults occur, these loans require cheap energy exports or resource concessions. Bitcoin mining disrupts this model, converting stranded energy (like flared natural gas or excess hydroelectric power) into liquid wealth without intermediaries or transportation costs.

Paraguay earns $50 million annually from hydroelectric mining, covering 5% of its trade deficit. Ethiopia made $55 million in just ten months. Bhutan is a standout: with $1 billion in Bitcoin (36% of its $3.02 billion GDP), its hydroelectric mining could generate $1.25 billion in wealth by mid-2025, repaying its $403 million World Bank and $527 million Asian Development Bank debts. Unlike IMF loans, the value of mined Bitcoin appreciates and can serve as collateral for non-IMF borrowing. This model of monetizing energy without relinquishing assets terrifies the IMF, as it undermines its control over the energy sector.

Bhutan's Prime Minister Tshering Tobgay calls Bitcoin a "strategic choice to prevent brain drain"

5) Grassroots Bitcoin Economies: Bottom-Up Power

Bitcoin is not only applicable to nations but also to communities. In Bitcoin Beach in El Salvador or Bitcoin Ekasi in South Africa, locals have used Bitcoin for daily transactions, savings, and community projects like schools or clinics. These circular economies are often sparked by charitable efforts aimed at self-sufficiency. In Argentina, where inflation frequently exceeds 100%, by 2021, 21% of people used cryptocurrency to protect their wealth. If these models gain traction, they could reduce reliance on national debt financing projects, which is certainly what the IMF fears most.

Bitcoin Ekasi founder Hermann Vivier states that his community was inspired by Bitcoin Beach in El Salvador to replicate their Bitcoin circular economy in South Africa

Conclusion

By enhancing local resilience, Bitcoin undermines the IMF's "crisis leverage." Thriving communities do not require bailouts, so the IMF cannot demand privatization to repay loans. In Africa, projects like Gridless Energy have already used renewable microgrids tied to Bitcoin mining to lift 28,000 rural Africans out of energy poverty, reducing the need for large projects supported by the IMF. If thousands of towns adopt this model, dollar shortages will no longer matter, and trade can bypass the dollar system.

Although the IMF occasionally spreads misinformation about Bitcoin's energy consumption and environmental impact to hinder its adoption, its more powerful tool is leveraging its financial influence over debtor nations to "encourage" compliance with its Bitcoin-free future vision.

The IMF has opposed Bitcoin adoption in El Salvador, the Central African Republic, and Argentina. Now, they are opposing Pakistan's intentions to mine Bitcoin as a nation-state. The expansion of these grassroots forces may compel the IMF to take more direct countermeasures.

Children in South Africa's poorest villages learn to surf through the Bitcoin Ekasi project

Grassroots Bitcoin economies empower communities to thrive without IMF bailouts. We need the power of the people to find new innovative ways to combat the IMF's strikes.