In a Tweet yesterday, the president of El Salvador Nayib Bukele mentioned that he just submitted two bills to secure the funds to buy back government bonds that mature in 2023 and 2025.
Here is the original Tweet of the president:
He added that despite speculation of a possible default by El Salvador, the country has enough liquidity to pay back all its debts. The International Monetary Fund (IMF) had urged Bukele in the past to reverse the governments actions of making bitcoin legal tender in the country.
Ever since bitcoin entered the bear market, mainstream media and bitcoin critics have been vocal about fears of a possible government default.
Bukele not only made bitcoin legal tender in El Salvador. He also purchased $103.9 million worth of bitcoin for the country’s treasury.
The El Salvadorian president spent an average of $45,171 per bitcoin and had been adamantly “buying the dip” and tweeting his purchases. His social media appearances turned him into somewhat of a rock star in the bitcoin community.
As of right now, El Salvador’s bitcoin holdings are down approximately 54% or $55.8 million.
Making bitcoin legal tender and purchasing over one hundred million worth of bitcoin has been met with skepticism by traditional financial institutions and the mainstream media.
Bukele’s actions resulted in the credit rating agency Moody’s downgrading El Salvador’s sovereign debt, stating: “It is due in large part to the lack of a credible financing plan, a factor that increases credit risks stemming from restricted market access due to El Salvador’s distressed foreign debt yields.”
There are currently a lot of eyes on El Salvador. It was the first country to adopt bitcoin as legal tender, followed by the Central African Republic earlier this year. Some people desperately want El Salvador to fail.
Others view it as the first domino stone of global, nation state-level bitcoin adoption.
