El Salvador’s President Bukele Confirms Bitcoin Plans Despite IMF Pressure

El Salvador's President Nayib Bukele Plans to Continue with Bitcoin Agenda if Re-Elected in Upcoming Election

El Salvador President Nayib Bukele plans to introduce Bitcoin-backed bonds and create Bitcoin cities as part of his re-election campaign.

Photo by Ruholamin Haqshanas

Last updated: February 1, 2024 03:14 EST | 2 min read

Source: A screenshot, Instagram/nayibbukele

El Salvador’s President Nayib Bukele is resolute in pushing his plans for Bitcoin, even if he secures a second term in the upcoming election. Despite pressure from the International Monetary Fund (IMF) to reconsider the country’s adoption of Bitcoin as legal tender during loan negotiations, the government remains steadfast in its decision, as reported by Reuters, citing Vice President Felix Ulloa.

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According to Ulloa, Bitcoin will continue to be recognized as legal tender in El Salvador. He also highlighted the recent approval by the U.S. Securities and Exchange Commission (SEC) of exchange-traded funds (ETFs) that track Bitcoin. This decision further strengthens the government’s resolve to maintain its cryptocurrency-friendly stance.

Nayib Bukele’s Ambitious Bitcoin Plans

The administration’s future plans include launching Bitcoin-backed bonds in the first quarter of 2024, constructing a tax-free crypto haven called Bitcoin City in the eastern part of the country, and offering passports to investors who contribute the equivalent of $1 million in cryptocurrency.

El Salvador made history in September 2021 by becoming the first country to adopt Bitcoin as legal tender, despite facing criticism from various quarters, including the IMF. However, the government remains optimistic and is determined to overcome obstacles to accessing IMF financing as it grapples with increasing public debt.

Bukele’s New Ideas party is predicted to win the upcoming election by a significant margin. If these predictions hold true, the president’s ambitious plans for Bitcoin-backed initiatives and the development of a crypto-friendly environment are expected to move forward. Ulloa, a 72-year-old lawyer, expressed confidence that the government’s decision to embrace Bitcoin enjoys global credibility and will continue to be upheld.

“The majority of the package has already been agreed upon,” he said.

El Salvador’s Bitcoin Bet Pays Off

El Salvador’s Bitcoin investment has proven to be profitable. According to data from Nayibtracker.com, which tracks the country’s Bitcoin purchases based on Bukele’s tweets, El Salvador stands to make approximately $4 million in profit if it decides to sell its holdings.

Other major cryptocurrency investors have also seen significant gains. MicroStrategy, one of the largest institutional holders of Bitcoin, has witnessed its unrealized profit soar to $2 billion. With Bitcoin reaching $42,000, the value of MicroStrategy’s holdings now amounts to around $7.3 billion, resulting in a profit exceeding $2 billion.

Similarly, Tether, the company behind the world’s largest stablecoin, has seen a substantial increase in the value of its Bitcoin reserves, surpassing $1 billion in profit. As of now, Tether holds 57,576 BTC, with an average purchase price of $22,480 per coin. This means the company’s holdings have gained approximately 85%, or $1.1 billion, since acquisition.

Q&A: What Else Might Readers Be Concerned About?

1. Will El Salvador’s commitment to Bitcoin affect their access to international financing?

El Salvador’s decision to adopt Bitcoin as legal tender has faced criticism from organizations like the IMF. While it may pose challenges to accessing IMF financing, the government remains optimistic about overcoming these obstacles and is determined to maintain its cryptocurrency-friendly stance.

2. What are the potential benefits of launching Bitcoin-backed bonds and creating a crypto haven?

By launching Bitcoin-backed bonds, El Salvador aims to attract investment and demonstrate the potential of cryptocurrencies as a secure and profitable asset. Creating a tax-free crypto haven called Bitcoin City is an innovative approach to foster a crypto-friendly environment and attract businesses and investors to the country.

3. How do El Salvador’s Bitcoin gains compare to other major investors?

El Salvador’s Bitcoin investment has yielded a profit of approximately $4 million. In comparison, companies like MicroStrategy and Tether have seen their unrealized gains reach billions. MicroStrategy’s holdings have soared to around $7.3 billion, resulting in a profit exceeding $2 billion, while Tether has surpassed $1 billion in profit with a significant increase in the value of its Bitcoin reserves.

Reference List:

1. Fidelity Bitcoin ETF Rakes in Reported $208M, Offsetting Grayscale Outflows Alone
2. Bitcoin Price Sell-Off as ETF Approval: Investors Turned Bearish
3. El Salvador’s Bitcoin Investment Yields $126 Million in Unrealized Gains Ahead of Bitcoin ETF Decision
4. Bitcoin Price Prediction: ETC Group Anticipates Surpassing $100,000 by End of 2024
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