El Salvador has no intention of abandoning bitcoin amid cryptocurrency

El Salvador has no intention of abandoning bitcoin amid cryptocurrency market decline

Salvadoran Finance Minister Alejandro Zelaya defended the country’s long-term strategy of using Bitcoin as legal tender – his view was not even touched by criticism from experts and the IMF, who called for the “legalization” of cryptocurrencies to be scrapped.

    Image source: Kanchanara/unsplash.com

Image source: Kanchanara/unsplash.com

El Salvador introduced bitcoin as legal tender almost a year ago. According to the minister, this enabled the provision of financial services to a significant number of residents who did not have access to banking services, as well as attracting tourists and investments to the country. The minister confirmed that the authorities have no intention of abandoning future issuance of crypto-backed bonds based on blockchain technologies.

To date, authorities have already purchased 2,381 bitcoins with public funds, the total value of which is now about 50% lower at the market rate than what was paid for at the time of purchase. According to statistics from the US National Bureau of Economic Research, most businesses and residents in El Salvador still prefer to pay in regular currency – the primary form of payment in El Salvador has been the US dollar for many years. The International Monetary Fund has repeatedly urged authorities to stop official use of bitcoins. Although the government of El Salvador is negotiating additional financial assistance with the IMF, it has not made any concessions on this issue.

    Image source: Bloomberg

Image source: Bloomberg

“We don’t expect overnight results. We can’t go to sleep poor and wake up millionaires.” explained Celaya. At the same time, he emphasized that new technologies showed that in earlier years people were afraid of things like websites and digital companies, but over time these fears dissipated. Earlier, amid news about the fall in cryptocurrency prices, he expressed confidence in the minimal financial risk of public investments.

So far, Bitcoin’s price drop has forced El Salvador authorities to delay issuing $1 billion in crypto-backed bonds, but they intend to return to implementing the relevant plan if market conditions improve. Additionally, the country continues to plan the construction of Bitcoin City and is preparing to announce more cryptocurrency-related projects in the coming months.

About the author

Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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