El Salvador says bet on Bitcoin is working and confirms Bitcoin Bonds
The government of El Salvador – the first country in the world to adopt Bitcoin (BTC) as legal tender – has claimed that the “bet” on cryptocurrency is working.
Although the price of BTC has plummeted by around 50% since the country implemented the “Bitcoin Law” in September 2021, the country’s Finance Minister Alejandro Zelaya remains optimistic about the digital currency.
In a recent interview with Bloomberg News, he said that abandoning the pursuit of financial innovation, as many suggest, would be wrong.
That’s because Bitcoin brought financial services to El Salvador to a largely unbanked population and attracted tourism and investment.
El Salvador Bitcoin Bonds
Zelaya also stated that although the use of BTC as a medium of exchange is low, he continues to believe in digital money.
Furthermore, he confirmed that the government will launch Bitcoin Bonds – Bitcoin-backed security using blockchain technology.
“For some, it’s something new and something they don’t fully understand. But it is a phenomenon that exists and is gaining ground and will continue for years to come,” Zelaya said.
The government of El Salvador is estimated to have acquired 2,381 Bitcoins with public funds. With the devaluation of the cryptocurrency, today, that amount is worth about 50% less than what the authorities paid for them, according to Bloomberg calculations based on tweets posted by the country’s president, Nayib Bukele.
It was precisely this price drop that delayed the country’s plans to issue a $1 billion Bitcoin-backed bond, as promised. However, Zelaya assured that the plan is still in place, if the market improves.
long term action
In any case, the minister remains confident in Bitcoin and the country’s long-term strategy:
“We will not have results overnight. We cannot sleep poor and wake up millionaires.” said Zelaya. “New technologies have shown how people in previous years were afraid of things like websites and digital businesses. But it has been shown that, over time, reality sets in.”
Zelaya also confirmed El Salvador’s plans to build the so-called “Bitcoin City”. According to the minister, the government will announce other Bitcoin-related projects in the coming months.
“I believe in the traditional international monetary system, just as I believe that new technologies will help human beings in the future,” Zelaya said. “So I think making this transition is vital and it would be wrong of us not to pursue financial innovation that could benefit El Salvador.”
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