Did El Salvador Defy the IMF and Bitcoin to Thrive During Bukele’s Second Term?
Reaffirming its commitment to cryptocurrency, El Salvador announced that Bitcoin will retain its legal tender status throughout President Nayib Bukele’s expected second term. Although the International Monetary Fund (IMF) called for a re-evaluation during the loan negotiations, Vice President Felix Ulloa, who is temporarily on leave to seek re-election, emphasized the government’s determined stance.
Meanwhile, this announcement strengthened El Salvador’s conviction after the US Securities and Exchange Commission (SEC) approved Bitcoin ETFs. As the country heads to the polls, the promise of the launch of Bitcoin-backed bonds and the creation of Bitcoin City, a tax-free crypto haven, looms large.
El Salvador Remains Committed to Bitcoin
El Salvador is standing firm on its decision to support Bitcoin as legal tender, defying the International Monetary Fund’s call for reconsideration during loan negotiations, Reuters reported. It is worth noting that El Salvador has a different approach to digital payments, especially Bitcoin.
Meanwhile, Vice President Felix Ulloa emphasized the government’s unwavering resolve, citing the recent approval by the U.S. Securities and Exchange Commission (SEC) as a key factor. The SEC’s decision to allow U.S.-listed Spot Bitcoin ETFs to track Bitcoin has further increased confidence in the country’s cryptocurrency-centric policies.
It is noteworthy that El Salvador’s vision extends beyond mere adoption. He emphasizes that Bitcoin-backed bond plans will continue if President Bukele and his New Ideas party achieve an expected victory in the upcoming elections. In addition, the creation of Bitcoin City, which is envisioned as a tax-free crypto haven, and the issuance of passports to investors who contribute $1 million to the cryptocurrency are also planned to move forward in the first quarter of 2024.
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Vision for Digital Payments
In a groundbreaking move in 2021, El Salvador broke away from traditional financial paradigms by adopting Bitcoin as a legal tender. The initiative, which aims to promote financial inclusion, create jobs and simplify remittances, highlights El Salvador as the first country to tread this uncharted path.
The government of El Salvador, led by President Bukele, remains determined despite criticism, especially from the IMF. Meanwhile, Ulloa confirmed the country’s determination to uphold Bitcoin law, citing its global credibility.
In a recent interview with Reuters, Ulloa emphasized the law’s immutable status, stating: “It now has the greatest credibility in the whole world.” In particular, Ulloa expressed his optimism about overcoming the obstacles in accessing IMF financing, stating that a significant part of the package has already been agreed upon, despite concerns about the increase in public debt.
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A seasoned professional with 3 years of experience in the financial market, Rupam has honed his skills as a meticulous research analyst and insightful journalist. She enjoys exploring the dynamic nuances of the financial landscape. Currently working as a sub-editor at Coingape, Rupam’s expertise goes beyond traditional boundaries. His contributions include breaking news, examining AI-related developments, providing real-time crypto market updates, and providing insightful economic news. Rupam’s journey is marked by his passion to demystify the intricacies of finance and deliver impactful stories that will resonate with diverse audiences.
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