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The recent downfall of FTX affected cryptocurrency prices in the global market. Many investors are afraid to invest in digital assets after facing a huge loss during FTX’s bankruptcy. Most of the crypto users lost millions of dollars on their cryptocurrency investments. Bitcoin, one of the largest popular cryptocurrencies, is also affected during this FTX downfall wave. Despite the current situation, the president of El Salvador plans to make a profit of $1 billion (USD) by using bitcoin-baked bonds.
The El Salvador administration is continually supporting the leading cryptocurrency, bitcoin. Recently Nayib Bukele, president of El Salvador, stated that he would buy one bitcoin daily. On Tuesday, the country’s economic minister sent a 33-page bill to El Salvador’s Congress to expand the adoption of cryptocurrencies in the Central American country. The bill also details raising $1 billion (USD) using the world’s first sovereign bitcoin-backed bonds.
In November 2021, Nayib Bukele collaborated with digital assets firm Blockstream to introduce $1 billion (USD) in bitcoin-baked bonds, commonly called Volcano bonds. Bukele planned to spend half the funds on constructing Bitcoin City near the Conchagua volcano to attract more investors. The remaining $500 million (USD) will be spent on buying more bitcoins.
Recently Nayib approached the International Monetary Fund (IMF) for a $1.3 billion (USD) loan needed to cover big gaps in its public finances. But the IMF denied the idea of Nayib Bukele by stating it wouldn’t help the country with looming debt payments as there were huge risks associated with the cryptocurrency. So Bukele decided to make cash by trading with China. According to the reports, Felix Ulloa, vice president of El Salvador, recently approached China. The economists believe that China will help the country by providing $21 billion (USD) of debt owed to foreign lenders.
El Salvador Imagined Bitcoin As An Economic Booster
El Salvador is recognized as the first nation to recognize bitcoin as a legal tender. Most crypto users in El Salvador believe that bitcoin can reduce reliance on the United States’ traditional currency. The country’s financial officials stated that in January 2022, four million users in El Salvador had authenticated the government’s digital wallet.
The Salvadoran government purchased its first bitcoin on September 6, 2021, buying 200 bitcoins at $10.36 million (USD). And the last transaction was on June 30, 2022, and the country purchased 80 coins for $19,000 (USD). El Salvador’s bitcoin holdings are worth less than $40 million (USD).
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
