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El Salvador stocks up on more bitcoins – criticism of crypto politics is getting louder

El Salvador stocks up on more bitcoins – criticism of crypto politics is getting louder
Written by insideindyhomes

El Salvador buys another 500 bitcoins
Average price of $30,744
Mixed record for crypto efforts

“El Salvador just bought the dip! 500 coins for an average price of $30,744,” declared El Salvador’s head of state, Nayib Bukele, on Twitter this week.

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El Salvador continues on crypto course

The country’s president put 15.5 million US dollars from the state treasury on the table for the purchase, thereby expanding the number of bitcoin coins owned by the country to a total of 2,301 bitcoin.

In the past few months, Bukele had bought bitcoins on the market several times and repeatedly justified this with the opportunity thanks to favorable purchase prices. In September 2021, for example, the state president included bitcoins in the digital state balance sheet – at the same time the digital coin became legal tender in the country. At the time, there was talk that the price declines had been used to get in cheaply.

So Bukele continues his crypto bet – even though the crypto market has been under pressure for some time and the prices – contrary to the expectations of the head of state of El Salvador – have not yet reached their low points.

Criticism of Bukele is getting louder

But the criticism of the country’s crypto offensive and in particular of Bukele’s efforts to make El Salvador a leading crypto nation are becoming louder with the ongoing price declines on the market – even in their own country. According to a study by the US National Bureau of Economic Research, only 20 percent of El Salvador’s citizens continue to use the state-owned wallet Chivo, which the government wanted to use to simplify the use of digital cash, after claiming its $30 bitcoin bonus have that the government guaranteed to every wallet user.

And the International Monetary Fund (IMF) has also been openly criticizing El Salvador’s crypto policy for some time. The experts have called on El Salvador to abolish Bitcoin as legal tender, citing the risks of crypto engagement in particular. “Significant risks to financial stability, financial integrity and consumer protection” loomed, according to the IMF’s board of directors in January.

The IMF’s assessment is important for El Salvador because the country has been in negotiations with the International Monetary Fund for a US$ 1.3 billion loan package for some time. Bukele’s recent bitcoin purchase may have made the negotiations even more difficult.

Mixed record for El Salvador

Because the track record of crypto investments does not currently speak for the country’s government – on average, the coins in the state balance sheet have lost around a third of their value. Since the most recent purchase, the Bitcoin price has also gone down again, and in the meantime it has even fallen below the $30,000 mark. So Bukele didn’t hit the lows.

However, El Salvador itself draws a positive balance for the crypto adaptation in the country. The tourism sector in particular has benefited from the crypto efforts, Minister of Tourism Morena Valdez announced on April 14, 2022 on the TV station TCS. Tourists interested in crypto stay longer in the country and spend more money there, and there is also a high level of interest in investments from abroad.

Editorial office finanzen.net

Image sources: GeniusKp / Shutterstock.com, Igor Batrakov / Shutterstock.com



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