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Could a Bitcoin crash turn El BUST into El Salvador? The government has lost $ 40 million in plans to build a cryptocurrency city

El Salvador’s Bitcoin bet could put the country at risk, as its shares have already lost $ 40 million due to the mere cryptocurrency.

The losses – the same as the Central American country’s next bond payment – are part of a so-called “crypto-winter” and the president’s plans to build a “crypto-city” driven by volcanoes.

President Nayib Bukele announced in September that El Salvador would become the first country in the world to accept Bitcoins as legal tender, with $ 105 million in digital currency.

But since then, its value has fallen by 45% amid the general bursting of the cryptocurrency bubble, reducing the value of 2,301 Bitcoins purchased by state coffers by $ 66 million.

The decision to take the legal price of Bitcoin has hurt investors, who see the state coffers as revealing the volatility of the crypto market and thus affecting the country’s ability to make bond payments.

“It’s risky because it’s a very volatile asset, and because it’s an investment that is entirely up to the president,” Bloomberg said, with Carlos Acevedo, the former head of the Central Bank of El Salvador.

El Salvador president Nayib Bukele (left, cap) FR-EE architecture studio has presented designs for a city funded by cryptocurrency that aims to rise on the side of a volcano in the south of the country.

President Nayib Bukele announced in September that El Salvador would be the first country in the world to accept Bitcoins as legal tender.

President Nayib Bukele announced in September that El Salvador would be the first country in the world to accept Bitcoins as legal tender.

The decision to take the legal price of Bitcoin has not been overseen by bond investors, who see the state coffers as revealing the volatility of the crypto market and therefore affecting the country’s ability to make bond payments.

The decision to take the legal price of Bitcoin has not been overseen by bond investors, who see the state coffers as revealing the volatility of the crypto market and therefore affecting the country’s ability to make bond payments.

El Salvador President Nayib Bukele took out $ 105 million in digital currency. But since then, its value has dropped 45% amid the general bursting of the cryptocurrency bubble, reducing the value of 2,301 Bitcoins purchased by state coffers by $ 66 million.

El Salvador President Nayib Bukele took out $ 105 million in digital currency. But since then, its value has dropped 45% amid the general bursting of the cryptocurrency bubble, reducing the value of 2,301 Bitcoins purchased by state coffers by $ 66 million.

Nayib Bukele (above) describes himself

Nayib Bukele (above) describes himself as the “most beautiful president in the world” who is a strong supporter of Bitcoin cryptocurrency.

“He buys on the phone when he wants to take advantage of the jump, but he doesn’t do it well, because when he buys there is always a greater seduction.”

El Salvador owes $ 382 million to bondholders this year, and July is the heaviest month for payments, with $ 183 million paid.

The nation has $ 3.4 billion in reserves in April, according to the central bank, and plans to raise $ 1 trillion through a Bitcoin-backed bond, although that is questionable given the collapse in the value of the cryptocurrency.

Despite these reservations, markets are now questioning El Salvador’s ability to manage its debt because of its relationship with cryptocurrency.

The rating agency Fitch downgraded El Salvador’s debt to CCC or “industrial waste”, worried that by 2022 it would reach 86.9% of GDP debt because it “raises concerns about debt sustainability in the medium term”.

Bukele has maintained its enthusiasm for digital currency as prices have plummeted, doubling with the purchase of another 500 bitcoin shares on May 9 for $ 15.5 million – now worth $ 14.1 million four days later.

On the same day, he tweeted the prolific architectural plans of a “crypto city,” a rich, green science-fiction view of a coastal megalopolis complete with a landmark and an airport.

Bukele has maintained its enthusiasm for digital currency as prices have plummeted, doubling with the purchase of another 500 bitcoin shares on May 9 for $ 15.5 million - now worth $ 14.1 million four days later.

Bukele has maintained its enthusiasm for digital currency as prices have plummeted, doubling with the purchase of another 500 bitcoin shares on May 9 for $ 15.5 million – now worth $ 14.1 million four days later.

The prosperous architectural plans of a “crypto-city” complete with a prosperous, green science fiction view of a coastal megalopolis with a landmark and an airport.

Bitcoin City's plans to build it - the start date of which is unclear - were placed near the Conchagua volcano in the Fonseca Gulf in the southeastern Central American country.

Bitcoin City’s plans to build it – the start date of which is unclear – were placed near the Conchagua volcano in the Fonseca Gulf in the southeastern Central American country.

“Trees everywhere,” he said on Twitter. ‘With a beautiful view of the volcano’.

Bitcoin City’s plans to build it – the start date of which is unclear – were placed near the Conchagua volcano in the Fonseca Gulf in the southeastern Central American country.

Nayib Bukele – First Millennium Dictator?

Nayib Bukele, who describes himself as the “most beautiful president in the world” for 40 years, is developing a new form of authoritarianism that will soon be accepted by other expert democratic leaders.

Since early May, he and his supporters have made classic authoritarian moves to strengthen their power over power and neutral democracy.

On May 1, he released the country’s Attorney General and Supreme Court, filling both institutions with loyalty.

Since then, he has used state agencies to harass journalists, investigate political opponents, and disrupt government balance sheets.

He is also drafting a new constitution.

He has explicitly stated that his mission is to ensure that his opponents never return to power.

However, it maintains the support of over 80% of the population in the polls.

He seems to have achieved this by positioning himself as an antidote to the notorious and endemic corrupt establishment in El Salvador, an opposition that never wants to return to power.

He has deliberately turned to the anti-liberal tendencies of the younger voters who are disillusioned with the democratic politics that have created decades of corruption.

They prefer to be an authoritarian leader who represents their interests.

First proposed in 2001, Bitcoin will be a “smart” city based on the use of digital currency, where citizens will be exempt from most taxes.

“We’re not going to have income taxes, forever. There are no income taxes, zero real estate taxes, no hiring taxes, no city taxes and zero CO2 emissions, ”Bukel said in a November note.

‘The only tax they will have on Bitcoin City is VAT, half of which will be used to pay for city bonds and the rest for the city’s public infrastructure and maintenance.’

El Salvador has struggled over the years with what currency to use. In 2001, it abandoned its volatile fiat currency – and therefore control of its monetary policy – in favor of the US dollar.

The move to Bitcoin was intended to help people in the country who rely on U.S. and other countries to avoid the services they needed to spend money on.

The government developed an app called Chivo Wallet to facilitate daily cryptographic transactions to encourage citizens who downloaded it with a $ 30 gift.

But only 20% of users continued to use it after passing gifts, making volatility an attractive unregulated cryptocurrency that turns it into a poor daily currency.

The nation was talking to the International Monetary Fund about an extended fund to help deal with the latest incident, but these were stopped by Bukele’s decision to make Bitcoin the legal equivalent.

Since then, the spread of exchanges of national credit separations – a type of insurance against missed payments – has risen by more than 20 percentage points, which means that the chance of default over the next five years is 87%.

El Salvador’s fatigue comes in the wake of the so-called “crypto-winter” of millions of investors who have lost millions of investors.

More than $ 200 billion was removed from the cryptocurrency market yesterday alone.

During the pandemic, record low interest rates aimed at boosting the economy led investors to buy riskier assets with higher rates of return such as cryptocurrencies.

As rising inflation leads to rising interest rates, to protect savings, these assets are being sold for the benefit of safer government bonds, which will yield better returns.

Could a Bitcoin crash turn El BUST into El Salvador? The government has lost $ 40 million in plans to build a cryptocurrency city

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