Seems fair, and a good show of mutual confidence and trust, if there were a multi-sig wallet or some kind of smart contract for each citizen such that both the govt and the citizen decide jointly if the citizen's allocated portion is to be broken into.  I mean, in theory the citizens bought it either through taxes, or opportunity costs associated with investment in infrastructure.

I'm not waiting up nights for ANY government, anywhere, ever, to willingly arrange such a thing.  Nor would it probably be good for John Q. Public given that the mainstream propaganda machinery could easily corral 95% of the population into a frame of mind where they would sacrifice their lives in an effort to give their share to the IMF, Blackrock, Musk, etc.  You know; to send them to mars or stop global warming or whatever.

If only the IMF wouldn't put their fingers into what others are doing or drop the developments down with the offers of loans being given to smaller countries..
I do think you are right, and in a decade or so, we may see more examples of how others would try to mimic El Sal, especially from the smaller countries.

Their loan from the IMF is worth $3.5 billion while the bitcoin they hold is worth just under $600 million. So selling all the bitcoins doesn't solve much of a problem for them and I think they made the right decision not to sell.

We need to be realistic, investing in bitcoin will bring significant profits but to solve the problems of an country's economy, we need more than just bitcoin. So, this may be a step back in using bitcoin as a currency but the national economy is more important than anything. We should not blame Nayib Bukele because as president, he must prioritize the economy and the lives of his people.

I do not think the closing of this particular wallet will immediately diminish the progress El Salvador has made into adopting Bitcoin. Bitcoin is still their legal tender after all. It may be a step backward but it is not as bad if we think about it. It is not like this particular wallet is widely used by everyone in the world. I would be concerned if they decided to ban a wallet or exchange being used by many around the world. This seems to be a small price to pay for the money they will be getting.
Of course fiat is still relevant. But we are still making good progress and El Salvador has been proof of that. There should be patience. The country bought bitcoin in hopes of fixing their country's economy and they can't afford to make their own terms unlike other big countries like USA maybe for example.

Bukele is regularly depositing 1 Bitcoin and storing it in a cold wallet also proves that he certainly has a long-term vision for Bitcoin, we can see like from Michael Saylor's perspective.

His visionary leadership has enabled the country to become a paradise for Bitcoin. If he keeps Bitcoin as the reserve currency of his country by doing DCA, then his country will definitely be much more profitable, especially after the next 20 years, his country will get a huge wealth of Bitcoin. If there is proper leadership in the development of the country, then that country will definitely develop.

If Bitcoin can be purchased using the country's reserve currency, I think this is a big opportunity for them. Gradually, the governments of the country are starting to come and in the future, El Salvador will be ahead of other countries in Bitcoin investment. After the next 1 or 2 decades, their country will go far ahead from its current position through Bitcoin holding.

MS is a Bitcoin-related company through and through. An entity that stands on its two with Bitcoin.
And El Sal - clearly, as you said, not that. it's not a company nor its roots are in Bitcoin.
So they may use it to their own extent, but they won't put all of their faith into it, and people shouldn't too.

Taking risks can sometimes lead to something really amazing and El Salvador has proven that to the world by being able to reap huge profits from bitcoin and this is a result of the courage of their president. Not many countries have dared to follow El Salvador’s lead because they may have been limited by the regulations that existed before that made it impossible to take the same approach as them. But from what El Salvador has shown itself, it should be a consideration for most other countries to make bitcoin a strategic move because now it has been proven by them to the best of their ability.

I agree with what you said that the bitcoin investment made by the El Salvador government has not been able to fully solve their complex economic problems. So El Salvador's current decision to only invest in bitcoin periodically and hold it is the right decision as a step for them to be able to help their economy in the future, and at the same time a step to mitigate the risk of bitcoin investment and maintain their economic stability. They are on the right track now and I am sure that they already have a long-term plan to increase the amount of their bitcoin investment.

El Salvador was the one country that started it all. If it wasn't because of El Salvador, other countries wouldn't be taking about adding BTC to their reserves by now. It's all thanks to President Nayib Bukele. He really sees the future in Bitcoin. If adoption for BTC continues to grow within El Salvador, it's likely other countries (particularly developing countries) will follow its footsteps.

Would you imagine BTC being a legal tender currency in China, Argentina, Russia, and even Venezuela? That would be mind-blowing. This will lead us one step closer towards the demise of Fiat. At least, that's the dream. The more valuable BTC gets, the closer El Salvador will be towards becoming a rich and developed country. Countries that are currently developed (like the US and UK) will become even richer than ever. "Fix the money, fix the world". Right?