President Nayib Bukele has addressed reports of default and announced that El Salvador has paid its $800 million debt in full.
El Salvador made one of the bravest decisions in modern economic history by adopting Bitcoin as legal tender in 2021. The decision drew widespread criticism from agencies such as the International Monetary Fund (IMF). The IMF even urged the North American country to drop Bitcoin as a legal tender citing risks to financial stability and consumer protection.
Flitch Ratings downgraded El Salvador’s long-term foreign currency issuer default rating (IDR) to CCC from B in February 2022. The main reason for the decision to downgrade the rating was the $800 million eurobond repayment that matured that month this.
Nayib Bukele takes to Twitter
The President of El Salvador took to Twitter to call out the media for predicting that the country will default on a loan. Nayib Bukele announced that El Salvador has paid the $800 million debt in full, plus interest. «They lie and lie and lie, and when their lies are exposed, they go into silence,» he said of the media.
According to Bloomberg, El Salvador before he paid off part of the debt by buying it back from the government. It was made after the country a A $450 million loan from the Central American Bank for Economic Integration.
The next payment is due in 2025. $6.4 billion of foreign bonds remain outstanding.
El Salvador accumulates Bitcoin
Nayib Bukele continued to downgrade Bitcoin during the crypto winter despite facing global criticism. In November, the President announced that they would buy one Bitcoin a day. The country now has 2,516 Bitcoins, according to Nayib Tracker, a website that tracks El Salvador’s Bitcoin portfolio.
El Salvador is down 47.31% on its Bitcoin holdings, bought at an average price of $43,530. Despite the unrealized loss of more than $51 million, the North American nation is paving the way for mainstream crypto adoption by educating its students on Bitcoin.
In 2022, over 10,000 El Salvador students were educated on Bitcoin, the Lightning Network, nodes, double spending, and events such as the Bitcoin halving.
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