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The President of El Salvador, Nayib Bukele, is planning to buy back $1.6 billion in bonds amid a persistent recession in the cryptocurrency market. The price of Bitcoin has plunged by nearly 70% from its all-time high, and El Salvador’s Bitcoin holdings have been affected by this.
El Salvador to buy back bonds
Bukele posted a tweet Tuesday saying he would send two bills to Congress to authorize funding for these buybacks. Bukele authorized the use of Bitcoin as a legal tender in September last year. In the recent tweet, Bukele stressed that the country’s finances were stable despite the massive recession witnessed across the cryptocurrency market.
Bukele said that El Salvador’s finances were still positive despite the dip in Bitcoin’s price. He added that the “transparent, public and voluntary purchase offer for the Bitcoin bonds would commence in six weeks. The bonds would be repurchased at the market prices.
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Bukele added that, unlike the reports the media has been circulating about the country’s mistimed Bitcoin bet, El Salvador has ample Liquity needed to repay its obligations as soon as they are due. The government also planned to buy its entire debt until 2025.
El Salvador made Bitcoin legal tender in September last year. Businesses in the country have been forced to accept Bitcoin if they have the technical capability to do so. The president has been using the country’s funds to buy Bitcoin, saying that he bought Bitcoin when he was doing other trivial things.
Bukele’s Bitcoin bet
According to Bukele’s tweets, the country has so far purchased 2381 Bitcoins valued at $52 million at the ongoing market prices. The website of Nayib Tracker monitors the announcements made by the president to provide transparency in the BTC held by the government.
Bitcoin’s price has dropped significantly this year. The price is currently around 70% below its record highs in November last year. The plunge has caused an over 50% decline in Bitcoin’s price, with some arguing that the behavior was reckless and triggered a risk to the economy.
Some of the largest institutions, such as JPMorgan and the International Monetary Fund, have attacked Bukele for making Bitcoin legal tender. According to the IMF, the country should abandon its Bitcoin plans.
However, the finance minister of El Salvador, Alejandro Zelaya, has said that the move was a sign of the liquidity of the country’s finances. El Salvador is one of the poorest countries in the US, with an $800 million debt to be paid by January next year.
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