In a bold move that has defined El Salvador’s economic landscape, Bitcoin is set to retain its status as legal tender in the country during the second term of President Nayib Bukele. This announcement, made by Vice President Felix Ulloa, reaffirms the government’s commitment to the groundbreaking decision made in September 2021, despite recent concerns raised by the International Monetary Fund (IMF).
El Salvador’s adoption of BTC as legal tender has been a source of controversy since its inception. The IMF, during negotiations for a billion-dollar loan, urged the Central American nation to “reconsider” its stance on BTC. However, Ulloa, temporarily on leave to campaign for re-election alongside Bukele, made it clear that the government has no intention of reversing this pivotal decision.
The recent approval by the U.S. Securities and Exchange Commission (SEC) to allow U.S.-listed exchange-traded funds (ETFs) tracking BTC has bolstered El Salvador’s resolve. Ulloa emphasized that the move by the SEC adds further legitimacy to BTC as a globally recognized and respected financial asset.
The use of ETFs is seen as a game-changer for Bitcoin, providing investors with exposure to the cryptocurrency without the need to directly hold tokens. This development is particularly crucial for a crypto industry that has faced its fair share of scandals. Ulloa stated in a recent interview with local media,
“Not only will it (the law) be maintained, but at this moment, it enjoys the greatest credibility in the entire world.”
El Salvador’s Pledge to Bitcoin-Backed Future
As El Salvador heads into an election where Bukele is expected to secure a decisive victory, the government remains steadfast in its commitment to Bitcoin. Plans to launch Bitcoin-backed bonds in the first quarter of 2024, the construction of BTC City, and the issuance of passports to investors contributing the equivalent of $1 million in Bitcoin are all set to proceed if the New Ideas party secures a win.
El Salvador’s journey with Bitcoin has been a decade in the making, and despite facing harsh criticism, the government stands firm. Ulloa, a 72-year-old lawyer, expressed optimism about overcoming obstacles to accessing IMF financing, even as the country grapples with an acceleration of public debt. “The majority of the package has already been agreed upon,” he affirmed.
In the face of global skepticism, El Salvador remains at the forefront of the cryptocurrency revolution, unwavering in its commitment to Bitcoin as a legal tender and a key component of its economic future.