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Thursday, April 18, 2024

El Salvador to Continue with Bitcoin-Backed Bonds, Says Vice President

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El Salvador’s Vice President, Felix Ulloa, affirmed on Wednesday that Bitcoin would continue to be legal tender in the country during President Nayib Bukele’s second term.

The announcement follows the IMF’s request to reevaluate the cryptocurrency as legal tender during ongoing negotiations for a substantial billion-dollar loan.

El Salvador’s Bitcoin Commitment Unwavering

As El Salvador prepares for a presidential election, where Bukele is expected to secure a decisive victory, the Vice President doubled down on the nation’s adoption of Bitcoin.

Ulloa, who is temporarily on leave to run for re-election with Bukele, reiterated the Central American nation’s commitment to adopting the cryptocurrency as legal tender. Despite the IMF’s reservations, the Salvadoran government has no intention of reversing the decision.

Ulloa added that the recent U.S. Securities and Exchange Commission (SEC) announcement allowing U.S.-listed exchange-traded funds (ETFs) that track Bitcoin strengthened its resolve.

In an interview with Reuters, Ulloa stated, “Not only will it (the law) be maintained, at this moment, it enjoys the greatest credibility in the entire world.”

Bitcoin-Backed Bonds on the Horizon

In a strategic move to further integrate Bitcoin into the country’s economic landscape, Ulloa revealed that if Bukele and his New Ideas party secure victory in the upcoming election, El Salvador would push ahead with plans to launch BTC-backed bonds in the first quarter of 2024.

Furthermore, Ulloa confirmed that the ambitious plan to construct Bitcoin City, a tax-free crypto haven proposed by Bukele in the eastern part of the country, and the issuance of passports to investors contributing the equivalent of $1 million in Bitcoin would proceed as planned.

El Salvador made history in September 2021 by becoming the first country to embrace Bitcoin as legal tender, which drew praise and criticism. The IMF, a vocal critic of which the government is negotiating a $1.3 billion Loan, has raised concerns.

However, Ulloa remains hopeful that the obstacles can be overcome. “The majority of the package has already been agreed upon,” he said.

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