Crypto crash could see El Salvador default on debt payments | TechBuzz

- Advertisement -


In context: The crypto crash is impacting many holders of digital assets, from individuals who have lost their life savings to crypto-investing businesses. The collapse is also having an impact on El Salvador. The country, which made Bitcoin legal tender last year, is estimated to have lost around $40 million through the falling price of BTC.

Bitcoin became an official currency alongside the US dollar in El Salvador last year. The move has proved controversial: many citizens feared the volatility of BTC would make the country’s economic problems even worse, and the government’s wallet app has proved far from reliable. El Salvador also faced pushback from the World Bank and the International Monetary Fund (IMF) over its decision.

- Advertisement -

Things have become even worse in El Salvador due to this week’s crypto crash that has seen almost $1 trillion wiped off cryptocurrency’s market cap. Bloomberg writes that Bitcoin’s 40% decline since late March means President Nayib Bukele’s losses on BTC have reached around $40 million, and that has raised questions over whether the government will be able to meet its next debt payment—an $800 million Eurobond repayment due in January next year. Several international credit agencies have already downgraded El Salvador’s credit rating to CCC, aka “junk.”

El Pais notes that the IMF, which could help El Salvador meet its next foreign debt payment, has urged Bukele to drop Bitcoin as legal tender, complicating the country’s relationship with the organization.

Bukele obviously isn’t concerned that adopting Bitcoin as legal tender was a costly mistake. On May 9, he bought 500 more coins for $15.5 million. At the time of writing, their value is down by about $500,000. He also reminded people that Bitcoin City is coming along beautifully, apparently.

- Advertisement -

h/t: PC Gamer

Masthead credit: Useacoin





Source link

- Advertisement -
Adminhttp://techbuzz.asia
I am admin of techbuzz.asia blog & I provide tech-related news. As a part of my hobby, I make content related to technology and gadgets reviews too. I love to be a content creator apart from it, I am a full-time employee in an MNC company and manage blogs systematically. You can mail me at [email protected]

More from author

Related posts

Advertisment

Latest posts

Want to stay up to date with the latest news?

We would love to hear from you! Please fill in your details and we will stay in touch. It's that simple!