Since El Salvador adopted Bitcoin (BTC) as its official currency, news has increased warning of alleged defaults on the country’s debt. But President Neb Bukel revealed that the government has paid off debts worth $800 million, or about R$4 billion in current terms.
The amounts correspond to debt securities issued by the state and are due in January. According to Bukele, El Salvador paid the bond on Monday (23), the same day as the maturity date. In his controversial style, Bukele announced debt repayment in Twitter.
“Last year, almost all the international mainstream media said that because of our “Bitcoin bet,” El Salvador would default by January 2023. Well, we paid the full $800 million, plus interest,” Bukele said.
Bukele also cited several articles in the press that pointed to negligence on the part of the Salvadoran government. Journalists cited the depreciation of BTC as one of the reasons for the eventual default, but the government was able to pay up.
“we pay in full”
On the same Twitter, Bukele lamented that most of the international media were not interested in publishing news of the payment. At the same time, they were among the first to question the state’s ability to pay debts.
Bukele specifically pointed out New York timeswhich claimed in July last year that El Salvador’s decision to buy bitcoin on a macro level could damage its monetary network and prevent it from paying down its debt.
In addition, the president stated that the country has paid off debts using its financial resources. This is without having to turn to the International Monetary Fund (IMF), one of the country’s biggest critics. In fact, the International Monetary Fund warned the country to abandon bitcoins exactly one year ago.
Binance CEO Changpeng Zhao (CZ) congratulated El Salvador on fulfilling its financial obligations. Alejandro Zelaya, the country’s finance minister, confirmed the bond payment and also criticized the press.
“Unfortunately, for the disinformation campaign of some national and international media, we announce that on this day we have completed the repayment of the 2023 bond in the amount of US$ 800 million, plus interest.”
In total, in addition to the $800 million, the government claims to have paid $604.1 million and interest of $23.4 million. That is, the state paid nearly 900 million US dollars in payments.
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El Salvador: The Land of Bitcoin
The government of El Salvador made BTC its official currency in September 2021. Since then, the cryptocurrency has broken all-time highs, but then entered a recession. In 2022 alone, the price of bitcoin has fallen by around 75%.
However, the Salvadoran authorities remained supportive of the cryptocurrency. The country has accumulated reserves of 2,381 BTC, which is now worth around $54 million. But the number could be higher, as President Bukele promised that the government would buy 1 BTC per day in mid-November.
The problem is that El Salvador has spent more than $103 million USD building its inventory over the past few months. This means that the country’s reserves have lost about 46% of their value.