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El Salvador abandons Bitcoin as legal tender

(ticotimes.net)
927 points smallerfish | 7 comments | 04 Feb 25 00:00 UTC | HN request time: 1.237s | source | bottom
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portaouflop ◴[04 Feb 25 02:07 UTC] No.42926658[source]▶
IMF gave them 1.4 billion to abandon the “experiment”:

> The IMF made this a condition for a loan of 1.4 billion US dollars (1.35 billion euros). In December of last year, the IMF reached an agreement with President Nayib Bukele’s government on the loan of the stated amount to strengthen the country’s “fiscal sustainability” and mitigate the “risks associated with Bitcoin,” as it was described.

—-

I dislike cryptocurrencies as much as the next guy but this was clearly something else than a failure of the currency itself

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dragonwriter ◴[04 Feb 25 04:41 UTC] No.42928058[source]▶
If you need to go to the IMF for a loan of ~3% of your GDP to mitigate the risks associated with Bitcoin, well, that's a pretty good sign that adopting Bitcoin as legal tender was a pretty disastrous failure.
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1. pajko ◴[04 Feb 25 05:19 UTC] No.42928348[source]▶
The loan was not to mitigate the risk of the Bitcoin. They needed the loan for reasons. The IMF deemed the high involvement in Bitcoin risky for the loan. The IMF text has a "meanwhile": https://www.imf.org/en/News/Articles/2024/12/18/pr-24485-el-...
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2. HaZeust ◴[04 Feb 25 07:12 UTC] No.42929101{3}[source]▶
... But what's wrong with his take? That's exactly what happened.
3. ailun ◴[04 Feb 25 07:15 UTC] No.42929135{3}[source]▶
FYI, I assume anyone using the words "stay mad" is actually the mad one. Just a note on your rhetoric, I have no opinion on El Salvador's bitcoins.
4. vanjajaja1 ◴[04 Feb 25 08:06 UTC] No.42929517[source]▶
because they started the experiment 20b in debt and have also managed to do a massive crime clean up + survive covid in that time. bitcoin is an overall benefit, but they are burdened but what has been
5. ◴[04 Feb 25 10:47 UTC] No.42930768[source]▶
6. el-salvador ◴[04 Feb 25 14:40 UTC] No.42932903[source]▶
> They needed the loan for reasons.

One of them being that El Salvador lost affordable access to the international bond market for a good part of the past years due to higher country investment risk, there were multiple reasons for that that are too long for one comment.

Some for the consequences have been:

The government switched to funding their bonds locally, including a good chunk of the local banks deposits which then the banks had to refinance to a longer longer term.

The government has been taking a good chunk of the pension funds with no interest paid back. Few details about this deal are available because the pension fund administrators and government supervisors have stopped publishing most of the financial reports for months.

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7. JALTU ◴[05 Feb 25 04:35 UTC] No.42943852[source]▶
"...gov't supervisors stopped publishing financial reports."

And you thought OKRs were bad! Ha ha ha, reports suck? Let's really make reporting consequential for individuals, like in China.

The irony is just that "reporting" is not a popular human activity, and why we have things like GAAP and try to enforce the rule of law...