El Salvador has split its $678 million Bitcoin reserve into 14 separate wallets. The move marks a shift away from a single-address structure, aiming to enhance security and transparency while addressing growing concerns about future technological risks.

Restructuring the Reserve

The country’s National Bitcoin Office confirmed that its holdings of 6,274 BTC have been redistributed into new wallets. Each wallet contains no more than 500 BTC, equivalent to around $54 million at current market value. A public dashboard has also been launched, allowing citizens to view balances and track transactions, a measure aimed at improving transparency in state-owned digital assets.

Blockchain data shows that the transfer took place on Friday, confirming the end of the single-wallet arrangement. According to Arkham Intelligence, the restructuring reinforces El Salvador’s position as the third-largest known sovereign Bitcoin holder, behind the United States and China.

Quantum Computing Concerns

Officials explained that the redistribution was partly motivated by potential risks from quantum computing. When Bitcoin is spent from an address, its public key becomes visible. In theory, if quantum computers advanced enough, they could attempt to exploit these exposed keys.

“By splitting funds into smaller amounts, the impact of a potential quantum attack is minimized”, the National Bitcoin Office wrote on X.

Experts, however, note that the threat remains distant. Current quantum machines cannot crack even the most basic encryption, and Bitcoin’s 256-bit cryptography is still considered secure. Industry figures such as MicroStrategy’s Michael Saylor have described fears as overstated, pointing out that Bitcoin’s protocol and hardware could be upgraded if real vulnerabilities emerged. In parallel, the U.S. National Institute of Standards and Technology (NIST) has been developing post-quantum cryptography standards, showing that preparations are already underway.

Broader Strategy and IMF Tensions

This reserve reshuffle comes at a time when El Salvador’s Bitcoin strategy continues to face international scrutiny. The International Monetary Fund (IMF), which approved a $1.4 billion package for the country in late 2024, has urged the government to scale back its cryptocurrency initiatives. In a July report, the IMF claimed El Salvador had not made new Bitcoin purchases since February, a statement the Bitcoin Office has not directly addressed.

The IMF has consistently warned about risks tied to Bitcoin’s volatility, including possible effects on the country’s financial stability and access to markets. Despite this, the Bukele administration continues to integrate Bitcoin into its financial identity, highlighting previous projects such as the $1 billion “Volcano Bonds” and collaborations on blockchain applications in public finance.

Closing Thoughts

El Salvador’s decision to split its $678 million Bitcoin reserve into 14 wallets highlights its evolving approach to managing state-held digital assets. While quantum computing is not yet a practical threat, the redistribution underscores the government’s focus on security and transparency. As international debates over its crypto policies continue, the move reflects an effort to strengthen safeguards while maintaining its position as a leading adopter of Bitcoin at the national level.