El Salvador’s President Nayib Bukele plans to buy back $1.6 billion in bonds amid a lingering slump in the cryptocurrency market. The price of bitcoin has fallen almost 70% from its all-time high, and El Salvador’s bitcoin holdings have been affected.
El Salvador to buy bonds
Bukele posted a Tweeter Tuesday saying he would send two bills to Congress to authorize funding for those buyouts. Bukele has authorized the use of Bitcoin as legal tender in September of last year. In the recent tweet, Bukele pointed out that the country’s finances are stable despite the massive recession seen in the cryptocurrency market.
Bukele said El Salvador’s finances are still positive despite the drop in Bitcoin price. He added that “the transparent, public and voluntary bid for Bitcoin bonds would begin in six weeks. The bonds would be redeemed at market prices.
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Bukele added that contrary to media reports of the country’s ill-advised bitcoin bet, El Salvador has enough cash to pay off its obligations as they come due. The government also planned to buy back all of its debt until 2025.
El Salvador made Bitcoin legal tender in September last year. Businesses in the country have been forced to accept Bitcoin if they have the technical capacity to do so. The president used the country’s funds to buy bitcoin, saying he bought bitcoin while doing other trivial things.
Bukele’s Bitcoin Bet
According to Bukele’s tweets, the country has so far purchased 2,381 Bitcoins worth $52 million at current market prices. The Nayib Tracker website monitors announcements made by the President to ensure transparency in government-held BTC.
The price of Bitcoin has fallen significantly this year. The price is currently around 70% lower than its highs of November last year. The plunge caused the price of Bitcoin to drop more than 50%, with some saying the behavior was reckless and triggered risk to the economy.
Some of the biggest institutions, such as JPMorgan and the International Monetary Fund, have attacked Bukele for making Bitcoin legal tender. According to the IMF, the country should abandon its Bitcoin plans.
However, El Salvador’s Finance Minister Alejandro Zelaya said the move was a sign of the liquidity of the country’s finances. El Salvador is one of the poorest countries in the United States, with $800 million in debt to pay off by January next year.
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