Original Title: How The IMF Prevents Global Bitcoin Adoption (And Why They Do It)

Original Author: Daniel Batten, BitcoinMagazine.

Original Translation: Luffy, Foresight News

In recent years, the International Monetary Fund (IMF) has been weaving a network to inhibit the development of Bitcoin through a series of measures:

· Successfully forced El Salvador to abandon Bitcoin as legal tender and revoke some other Bitcoin-related policies

· Pressured the Central African Republic through regional bank institutions to repeal a Bitcoin bill in 2023

· Resulted in Argentine President Mile's Bitcoin campaign promises not translating into action

· Expressed "serious concerns" about Pakistan's Bitcoin plans

· Crypto has consistently been viewed as a "risk" in loan negotiations

Here is a summary table:

As we have seen, the only countries able to resist IMF pressure are El Salvador (until 2025, before receiving IMF loans) and Bhutan. Every country that has accepted IMF loans and attempted to adopt Bitcoin at a national level has been successfully blocked by the IMF or significantly frustrated.

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

In this detailed report, we will delve into the IMF's success in inhibiting Bitcoin adoption in three countries and point out how they may achieve a similar outcome in Pakistan. In the final part of this report, we explore the IMF's five concerns about Bitcoin and how, despite nations top-down abandoning or partially abandoning Bitcoin, it 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 also a geopolitical chain, endorsed by France and managed by the Central Bank of Central African States (BEAC). Among its 14 member countries, 6 Central African countries (including CAR) still need to keep 50% of their foreign exchange reserves in Paris.

This control over foreign exchange reserves has led to economic dependence and also created a favorable export market for French goods. For example, in 1994, under Western (especially IMF) pressure, the CFA franc was devalued by 50%, leading to a surge in import costs. Exporters (mainly EU exporters) could acquire resources from CFA countries at half the price. Locally, the impact was devastating, resulting in widespread wage freezes, layoffs, and massive social unrest.

When the Central African Republic announced the adoption of Bitcoin as legal tender in 2022, the BEAC and its regulatory body, the Central African Republic Business Advisory Council, immediately declared the law invalid, citing a violation of the treaty establishing the Central African Economic and Monetary Community. This was not mere bureaucracy but a warning from the "Franc Afrique" currency guardians.

Why is this important? To date, the Central African Republic's economy heavily relies on IMF assistance. Its $1.7 billion external debt (61% of GDP) means that defying the BEAC would risk financial isolation.

IMF's Quiet Action

The IMF acted swiftly. On May 4, 2022, within two weeks, the IMF publicly condemned the Central African Republic's "dangerous experiment," stating that its crypto ban, in conflict with the Central African Economic and Monetary Community, posed significant legal, transparency, and economic policy challenges. This move echoed concerns similar to those seen with El Salvador's adoption of Bitcoin: risks to financial stability, consumer protection, and fiscal liabilities (notably absent in El Salvador).

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

Timeline Unveiled

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

A key part of thwarting the Central African Republic's Bitcoin ambitions was ensuring that the Sango Project (a blockchain initiative launched by the Central African Republic government aimed at selling "e-residency" and citizenship for $60,000 worth of Bitcoin) would not proceed.

Sango Project: Coincidence or Conspiracy?

In July 2022, the Central African Republic launched the Sango Project, with the aim of raising $2.5 billion, equivalent to the country's annual GDP.

The Sango project has failed. By January 2023, only $2 million had been raised (0.2% of the target). An IMF report cited the reason for the failure as the "technological barrier of a 10% internet penetration rate," but our analysis reached a completely different conclusion. Two factors destroyed the Sango project:

· Investor Exodus

· A ruling by the CAR Supreme Court obstructed the Sango project

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

· Investor Flight

The role played by the IMF in this process was indirect but compelling.

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

· In July 2022, during a staff visit for a surveillance program review, the IMF pointed out that "an economic downturn has been exacerbated by rising food and fuel prices," potentially fueling investor caution.

· Reports also indicated that the IMF and the CAR Business Advisory Council warned of the inherent risks of the CAR's crypto initiatives, further deepening people's concerns.

The timing of these IMF statements aligns with the observed investor flight, indicating that its position as an authoritative financial institution may have influenced market sentiment.

Supreme Court Ruling

Superficially, the Supreme Court ruling may seem like an isolated event, but a deeper dive reveals doubts about the independence of the CAR's judiciary—the country's Corruption Perception Index ranks 149/180 (very low).

As previously mentioned, one week after the CAR 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. International Transparency organizations (such as Gan Integrity) stated that the Supreme Court, part of the CAR's judiciary, is one of the country's most corrupt institutions, plagued by inefficiency, political interference, and potential bribery or political pressure.

The collapse of the Sango project became IMF's "Evidence A": "Proof that Bitcoin cannot operate in fragile economies". However, the reality is that the "concerns" continually expressed by the IMF preemptively disrupted the project environment, making this conclusion possible.

5,200 miles away, in the small country of Bhutan, we saw a completely different picture: Bitcoin successfully took root without IMF "involvement".

An Obvious Conclusion: Bitcoin's Resilience Transcends Borders

The turnaround in the Central African Republic had nothing to do with the feasibility of Bitcoin but was about power. The IMF used the Regional Banking Alliance to cut off the Central African Republic's sources of capital and leveraged a $191 million loan to eliminate the threat to financial sovereignty. When the Sango project ran into trouble, the trap suddenly closed in.

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

· Bitcoin remittances in Nigeria still bypass the dollar channel, saving millions of dollars in fees

· Bitcoin trading in Kenya has thrived without IMF approval

· El Salvador continues to accumulate Bitcoin despite the mention of Bitcoin 221 times in the loan conditions

The pattern is clear, where Bitcoin is adopted from the grassroots, it can survive and thrive. However, for countries that have declared a top-down Bitcoin plan and are burdened with heavy IMF loans, they have all encountered overwhelming resistance: El Salvador, Central Africa, Argentina, and now Pakistan.

The $1.151 billion IMF loan balance that Central Africa has not repaid has made it subject to IMF pressure. In countries like Bhutan without IMF loans, Bitcoin has slipped through the IMF's fingers. Every peer-to-peer payment, every Lightning Network transaction, is eroding the foundation of the old system.

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

2. Argentina's $450 Billion Bitcoin Adoption Barrier

If the Central African Bitcoin plan was thwarted, Argentina never even took off. President Milei's pre-election statements hinted at major action, but in the end, there was no progress. Was this just political rhetoric during elections, or is there another hidden story? This section will uncover the truth behind the failed Bitcoin plan in Argentina.

Understanding Bitcoin's adoption progress is like evaluating whether a rocket can reach escape velocity: we must consider both thrust and resistance.

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

In my experience running a tech company, we have faced a similar situation. Our technology is 10 times better than traditional systems, faster, more cost-effective, but they won't easily give up their existing monopoly.

What Happened in Argentina?

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

But 18 months into his presidency, Milé's Bitcoin vision remains unfulfilled. Why? The IMF's $450 billion funding controls the country's Bitcoin development.

IMF's Veto Power in Argentina

Limitations were in place even before Milé's election. On March 3, 2022, the previous Argentine government signed a $450 billion IMF assistance agreement. In the following weeks, disclosed details revealed an unusual clause in the agreement: a requirement to "block cryptocurrency use." This was not a suggestion but a loan condition documented in the IMF letter of intent, citing concerns about "financial disintermediation."

Direct impacts:

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

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

Milé's Shift

After Milé took office:

· Lowered monthly inflation rates from 25% to below 5% (May 2024)

· Lifted currency controls (April 2025)

· Secured a new $200 billion IMF agreement (April 2025)

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

Yet, Argentina's case is ironically intriguing: despite the IMF blocking official Bitcoin adoption, Argentinians are still embracing Bitcoin. Between 2023 and 2024, cryptocurrency holdings in South America grew by 116.5%, with Argentina having the highest holding rate in the region at 18.9%, nearly three times the global average. Moreover, due to the high annual inflation rate of 47.3% (as of April 2025), this proportion has significantly increased. This is a quiet resistance that the International Monetary Fund cannot control.

What Will Happen Next?

All eyes are on the mid-term elections in October 2025. If Milei gains support, he may challenge the IMF's red lines. However, the lesson learned so far is clear: when a country borrows from the IMF, its monetary sovereignty is restricted.

Key Points

· The IMF's 2022 loan explicitly linked Argentina's assistance to anti-crypto policies

· Milei prioritizes economic stability over Bitcoin advocacy to secure IMF support

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

· Argentinians circumvent restrictions through grassroots Bitcoin adoption

3. El Salvador: A Partial Victory Over the IMF

When El Salvador made Bitcoin a legal tender in 2021, it was not just adopting a cryptocurrency but declaring financial independence. President Nayib Bukele saw 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 roadblock: the IMF.

The Cost of Assistance

To secure the 2024 loan, El Salvador agreed to dismantle key pillars of its Bitcoin policy:

· Voluntary adoption: Businesses are no longer mandated to accept Bitcoin

· Public sector ban: Government entities are prohibited from conducting Bitcoin transactions or issuing debt, including banning tokenized tools pegged to Bitcoin

· Bitcoin Reserve Freeze: All government purchases halted (6000+ BTC reserve now frozen) with a full audit of holdings required by March 2025

· Trust Fund Liquidation: Fidebitcoin (conversion fund) to be dissolved under an auditable process

· Chivo Wallet Phasing Out: Majority of users found converting BTC to USD, leading to gradual phase-out of the $30 incentive program

· Tax Rollback: USD becomes the sole option for taxation, eliminating Bitcoin's utility as sovereign payment

Bukele's Strategic Retreat

El Salvador's compromise holds financial significance:

· With bond repayment looming, loans have stabilized the debt (at 84% of GDP)

· Dollarization remains unchanged (USD still the primary currency)

But considering Bukele's rhetoric in 2021, this retreat comes as a shock. The low Chivo Wallet adoption rate may have driven this concession.

What's Left of the Experiment?

The IMF didn't kill El Salvador's Bitcoin; it only stifled official adoption. Grassroots usage persists:

· Bitcoin Beach continues to operate, actually thriving

· The tourism sector is attracting more and more Bitcoin enthusiasts

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

The Road Ahead

El Salvador's Bitcoin future holds two scenarios:

· Slow Fading: Bitcoin becomes a tourist curiosity as IMF conditions take full effect

· Shadow Revival: The private sector sustains its survival amid government withdrawal

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

Key Takeaways

· IMF loan forces El Salvador to reverse 6 key Bitcoin policies

· Sets a precedent for other nations seeking IMF support

· Grassroots Bitcoin Adoption May Be More Sustainable Than Government Involvement

El Salvador has made many concessions on the Bitcoin issue. Although this may not have hurt El Salvador much, it sent a strong signal to other Latin American countries (such as Ecuador and Guatemala) that had observed El Salvador and considered copying its strategy (until they verified the scale of their IMF loans). Therefore, overall, this is a partial victory for the IMF, and a partial victory for El Salvador.

4. Bhutan: A Successful Story of Breaking Free from IMF Shackles

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

The IMF has warned that nations embracing Bitcoin will disrupt economic stability, reduce the efficiency of 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 held Bitcoin to increase civil servant salaries by 50%"

· Bhutan was able to "utilize Bitcoin reserves to avoid a crisis as foreign exchange reserves fell to $689 million"

· Prime Minister Lotay Tshering stated in an interview that Bitcoin also "supports free healthcare and environmental projects"

· Tshering also mentioned that their Bitcoin reserves help "stabilize the country's $3.5 billion economy"

· Independent analysts say, "This model can attract foreign investment, especially for countries with undeveloped renewable resources"

· Considering the IMF's analysis is not only incorrect but also almost entirely backwards, it raises a question: are IMF's forecasts data-driven?

5. Five Reasons IMF Might Worry About Bitcoin

"Get all of your friends, libertarians, Democrats, Republicans, get everybody to buy Bitcoin—and then it will become democratized." John Perkins said at the 2025 Bitcoin conference

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

In a recent conversation I had with John Perkins (author of "Confessions of an Economic Hitman"), some things became clear. Alex Gladstein had previously sharply exposed how the IMF's "structural adjustments" did not eliminate poverty, but instead made creditor nations wealthier. Perkins supplemented this point with his firsthand information.

Perkins revealed to me how the Global South has been caught in a debt trap: a design intended to channel wealth to the West. But the turning point is this: Bitcoin has already undermined this script in five crucial ways.

1) Lowering Remittance Costs to Loosen Debt Shackles

Chris Collins' sculptural depiction portrays a debt noose

Remittances (money sent back home by immigrant workers) typically constitute a significant portion of developing countries' GDP. Traditional intermediaries like Western Union charge fees as high as 5-10%, which is akin to a hidden tax. For countries like El Salvador or Nigeria, the central bank must hold US dollars to stabilize the national currency, and these dollar reserves are often provided by the IMF.

Bitcoin Changes the Game

With the Lightning Network, transaction fees are almost reduced to zero and are instant. In 2021, El Salvador's President Bukele optimistically predicted that Bitcoin could save $400 million in remittance fees. However, there is little evidence to suggest that remittance fees using Bitcoin have come close to this threshold. Nonetheless, the potential is evident: more Bitcoin remittances will lead to higher dollar reserves, reducing the need for loans from the International Monetary Fund (IMF).

No wonder the IMF mentioned Bitcoin 221 times in El Salvador's loan conditions for 2025; they seek to maintain their position as a relevant lending institution.

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

The numbers speak for themselves:

· Pakistan loses $18 billion annually due to remittance costs, most of which could be saved with Bitcoin

· El Salvador only uses 1.1% Bitcoin remittances, saving over $4 million annually

Currently, the application of Bitcoin has not been fully adopted. Only 12% of Salvadorans regularly use Bitcoin, while over 5% of remittances in Nigeria are done through cryptocurrency. But the trend is clear: every Bitcoin transfer weakens the debt-reliant cycle.

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

By 2024, Nigeria's total remittances will approach $21 billion, accounting for over 4% of GDP

2) Avoiding Sanctions and Trade Barriers

Oil-rich Iran, Venezuela, and Russia have each been restricted from U.S. dollar channels of access due to American sanctions in 1979, 2017, and 2022 respectively, leading to a significant reduction in oil exports.

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

Iran has also mined energy exports into Bitcoins to evade sanctions, avoiding the IMF's "reform for cash" ultimatum while keeping the economy afloat. As Russia and Iran lead the way in Bitcoin oil trading, the dominance of Petrodollars weakens.

Another country facing economic hardship due to sanctions that has utilized Bitcoin to bypass restrictions is Afghanistan, which uses Bitcoin for humanitarian aid. NGOs like the "Code Incentive" have circumvented Taliban bank freezes, and the "Digital Citizen Fund" has used Bitcoin to provide aid post-Taliban takeover, preventing some families from starving.

Afghanistan's "Code Incentive" NGO leverages 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 Iran and Venezuela's oil exports, the trend is growing.

Sanctions are a key tool of geopolitical leverage, typically supported by the IMF and World Bank as they align with major economies like the United States. Sanctioned countries using Bitcoin have reduced the IMF's control over fund flows while threatening the U.S. 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 their foreign reserves and stabilize their currency. However, once unable to repay, they ultimately face austerity measures or are forced to sell strategic assets at a discounted price. Bitcoin offers a way out as a global, non-inflationary currency that is not subject to government regulation and has the potential to appreciate.

El Salvador's experiment showed that Bitcoin can reduce dollar dependence. By holding Bitcoin, a country 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% devaluation of the peso that year, avoiding IMF assistance. Bitcoin's neutrality also means that no single entity can impose conditions, unlike IMF loans that require privatization or unpopular reforms. In terms of promoting Bitcoin adoption, it has neither debt leverage nor the long history of the IMF to draw upon. However, due to the Lindy Effect (see the diagram below), Bitcoin becomes a more viable alternative each year.

Lindy Effect: The longer something has been successful, the more likely it is to continue to be successful.

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

Many developing countries are rich in energy but burdened by debt, trapped in the quagmire of IMF loans for infrastructure like dams or power plants. When defaults occur, these loans demand cheap energy exports or resource concessions. Bitcoin mining disrupts this pattern by converting stranded energy (such as flared natural gas or surplus hydropower) into liquid wealth without intermediaries or transportation costs.

Paraguay earns $50 million annually through hydroelectric mining, covering 5% of its trade deficit. Ethiopia made $55 million in just 10 months. Bhutan is a standout: owning $1.1 billion in Bitcoin (36% of its $3.02 billion GDP), by mid-2025, its hydropower mining could generate $1.25 billion in wealth annually, repaying its $403 million World Bank and $527 million Asian Development Bank debt. Unlike IMF loans, the appreciating value of mined Bitcoins serves 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 Stop Brain Drain"

5) Grassroots Bitcoin Economy: The Power from Bottom to Top

Bitcoin is not only applicable to nations but also to communities. In El Zonte's Bitcoin Beach or South Africa's Bitcoin Ekasi, locals have been using Bitcoin for everyday transactions, savings, and community projects such as schools or clinics. These circular economies are often sparked by charitable causes aimed at achieving self-sufficiency. In Argentina, where inflation often exceeds 100%, by 2021, 21% of the population was using cryptocurrency to protect their wealth. If these patterns are promoted, it could reduce reliance on national debt-financed projects, something the IMF certainly does not wish to see.

Bitcoin Ekasi founder Hermann Vivier stated that his community was inspired by El Zonte's Bitcoin Beach and replicated their Bitcoin circular economy in South Africa.

Conclusion

By enhancing local resilience, Bitcoin has weakened the IMF's "crisis lever." Prosperous communities do not require bailouts, thus the IMF cannot demand privatization to repay loans. In Africa, projects like Gridless Energy have used renewable microgrids tied to Bitcoin mining to lift 28,000 rural Africans out of energy poverty, reducing the need for large-scale IMF-supported projects. If thousands of towns adopt this model, the scarcity of the US dollar will no longer be significant, 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 potent tool is to leverage its financial influence over debtor nations to "encourage" compliance with its non-Bitcoin future vision.

The IMF has opposed El Salvador, the Central African Republic, and Argentina's adoption of Bitcoin. Now, they are opposing Pakistan's intent to mine Bitcoin on a national scale. The expansion of these grassroots forces may compel the IMF to take more direct punitive measures.

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

The grassroots Bitcoin economy empowers communities to thrive without IMF assistance. We need the power of the people to find new innovative ways to counter the IMF's impact.

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