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El Salvador abandons Bitcoin as legal tender

(ticotimes.net)
927 points smallerfish | 4 comments | 04 Feb 25 00:00 UTC | HN request time: 0s | source
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Mengkudulangsat ◴[04 Feb 25 00:11 UTC] No.42925325[source]▶
> The government, she assured, will continue buying bitcoin and having reserves in this cryptocurrency

Sounds like the term "Failed Experiment" is the writer's assertion and not the government official position.

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cwillu ◴[04 Feb 25 00:26 UTC] No.42925524[source]▶
“Another change makes using bitcoin entirely voluntary. (Previously, the law mandated that businesses accept bitcoin for any goods or services they provided.) Additionally, bitcoin can no longer be used to pay taxes or settle government debts.”

--https://reason.com/2025/02/03/el-salvador-walks-back-its-bit...

Sounds pretty failed to me.

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desumeku ◴[04 Feb 25 00:29 UTC] No.42925557[source]▶
They did this to receive a loan from the IMF. The IMF was withholding the loan because of BTC and would not disburse it until they got rid of its status as legal tender.
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Mengkudulangsat ◴[04 Feb 25 00:44 UTC] No.42925736[source]▶
Fair demand by the IMF.

Presumably they require their loan to be repaid in fiat because of their internal charter. If Bitcoin adoption eventually removes El Salvador's ability to issue fiat, their loan can't be repaid.

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bawolff ◴[04 Feb 25 01:19 UTC] No.42926133[source]▶
That's not really how that works. IMF can demand their loan be repaid in whatever currency they want. Its totally normal for international loans to be denominated in a currency other than the recipient's legal tender, particularly for high risk countries (although that is usually bad for the recipient)
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1. throwaway314155 ◴[04 Feb 25 01:38 UTC] No.42926340{3}[source]▶
They don't want Bitcoin in exchange. Seems entirely reasonable to me given how much the value of cryptocurrency fluctuates with low predictability. They could get paid in it one day and lose half the value the next.
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2. ty6853 ◴[04 Feb 25 01:55 UTC] No.42926517[source]▶
This is why otc tradfi crypto futures are needed. You can buy a train car full of corn a year out trivially on a liquid futures market, regardless if corn prices fluctuate wildly you will pay what was agreed. Listing BTC derivatives would solve the predictability for fixed loan terms.
3. bboygravity ◴[04 Feb 25 06:57 UTC] No.42929003[source]▶
Fiat currencies also can and have lost half their value plenty of times.

Actually I can't think of any fiat currency that hasn't at least halved in value?

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4. graemep ◴[04 Feb 25 11:57 UTC] No.42931248[source]▶
Usually over a long time. They are a lot less volatile than Bitcoin.

You can also offset the risks of sudden devaluation through matching assets and liabilities, trading derivatives and so on.