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🇸🇻EL SALVADOR SECURES $3.5 FUNDING DEAL
➡️Bitcoin remains legal tender
➡️El Salvador will continue buying bitcoin (at possibly an accelerated pace) for its Strategic Bitcoin Reserve
➡️Bitcoin capital markets will continue to be built; for example, the recent tokenized issuance…— Stacy Herbert 🇸🇻🚀 (@stacyherbert) December 19, 2024
The IMF is of course pushing the dollar, despite the fact that every country would do much better if they were on the Bitcoin standard.
The IMF, like all of these “international” organizations, is simply a branch of the US federal government, and they will do whatever the US government wants them to do.
El Salvador said on Thursday it would keep buying bitcoin, possibly at an accelerated pace, a day after the government reached a financing agreement with the International Monetary Fund that had said it should limit its exposure to the cryptocurrency.
Stacy Herbert, El Salvador’s national bitcoin office director, wrote on X that bitcoin would remain legal tender in the Central American country, and that the government would keep adding to its strategic reserves.
On Wednesday, El Salvador struck a $1.4 billion loan deal with the IMF, as part of which the government of President Nayib Bukele agreed that it would scale back its bitcoin policies. The deal specified that tax payments will only be made in the other official tender, the U.S. dollar.
IMF spokesperson Julie Kozack said on Thursday that planned legal reforms in El Salvador would make acceptance of bitcoin by the private sector voluntary.
…
El Salvador owns 5,968 coins, valued at $594 million. Bitcoin has rallied in recent days after U.S. President-elect Donald Trump reiterated plans for a strategic reserve for the cryptocurrency, similar to a strategic oil reserve.
Well, it didn’t rally today, I can tell you that much.
But hey, look – it’s on sale today.
Trump’s statements about a Bitcoin reserve are a much bigger deal than the fed making statements about rates. Trump is going to lower rates regardless to get money flowing again.
Bitcoin will probably go back down again in the future… but maybe it won’t?
It’s probably the only asset that even makes sense. You can say real estate, but how much confidence do you have that the US government won’t confiscate your property?
Bitcoin is one thing they cannot confiscate.
To recap:
The Bitcoin Law was rather unfortunately launched straight into a bear market.
Domestically, it was one of Bukele’s least popular policies. Most people didn’t know what Bitcoin was or thought it was a scam. pic.twitter.com/afqos4SXkm
— Lina Seiche (@LinaSeiche) December 19, 2024
Loans were frozen. The IMF threatened to kill its year-long loan negotiations.
They wanted—needed—the world to understand: Bitcoin makes you an outcast.
Can the Bitcoin Law make up for billions in lost income? Definitely not in the short term, and Bukele had a country to run. pic.twitter.com/ydqp8jKpom
— Lina Seiche (@LinaSeiche) December 19, 2024
This perseverance paid off when El Salvador emerged from the bear market with:
➡️ its Bitcoin holdings in profit
➡️ an array of new financing deals
➡️ recovering credit ratings
➡️ a Bitcoin Country brand that looks stronger than ever. pic.twitter.com/VyRnppRaws— Lina Seiche (@LinaSeiche) December 19, 2024
Following negotiations and a proverbial turning of the tables, the IMF has made big concessions.
Could El Salvador do without the loan? Yes, probably.
But that would be an ideological decision, not a pragmatic one—small countries generally don’t do well in the ideology game. pic.twitter.com/wTVGx4ZSNI
— Lina Seiche (@LinaSeiche) December 19, 2024
… for the IMF:
It’s a way to save face. It would set a very bad precedent if Bitcoin Country did away without the loan. So the IMF cashed in its symbolic victories instead and called it a day (“you must use dollars to pay your taxes!”). pic.twitter.com/xBtauo7UcJ— Lina Seiche (@LinaSeiche) December 19, 2024
It’s easy to criticize from a point of idealism, but the real world requires nuance, strategy, and the consideration of political cost vs. benefit.
Everyone involved in the deal can frame the outcome in their favor. As for Bitcoin Country, I have a feeling there’s more to come. pic.twitter.com/uNDx3qw2us
— Lina Seiche (@LinaSeiche) December 19, 2024
