El Salvador does not intend to give up Bitcoin in the face of market collapse

El Salvador does not intend to give up Bitcoin in the face of market collapse

The Minister of Finance of El Salvador, Alejandro Zelaya, defended the country's long-term strategy of using Bitcoins as a legitimate means of payment — in his view, not even the criticism of experts and IMF calling for the abolition of the "legalization" of cryptovalts did not affect him.

El Salvador had almost a year ago accepted Bitcoin as a legal means of payment, which, according to the Minister, had made it possible to provide financial services to a large number of people without access to banking services, as well as to attract tourists and investments, and the Minister had confirmed that the authorities did not intend to abandon the future issuance of secured cryptative bonds based on blocking technology.

To date, the authorities have purchased 2,381 bitcoin in public funds, the total value of which is now about 50 per cent lower at the market rate than it was at the time of their purchase. According to the statistics of the National Bureau of Economic Research of the United States, most businesses and ordinary Salvadorans still prefer to pay the regular currency, the principal payment in El Salvador for many years is the United States dollar. The International Monetary Fund has repeatedly called on the authorities to renounce the official use of the Bitcoins. Despite the fact that the Government of El Salvador is negotiating with the IMF for additional financial assistance, it has not made concessions in this regard.

He pointed out that new technologies had shown how people in previous years feared things like websites and digital businesses, but over time those fears had been dispelled. Previously, in the face of news of a fall in courses, he had expressed confidence in the minimal financial risk to public investment.

So far, the fall in the Bitcoin has forced the Salvadoran authorities to postpone the issuance of $1 billion worth of secured cryptoval bonds, but they intend to return to the plan when market conditions improve, and the country is still planning to build Bitcoin City and are preparing to announce other cryptoval projects in the coming months.