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El Salvador abandons Bitcoin as legal tender

(ticotimes.net)
927 points smallerfish | 5 comments | 04 Feb 25 00:00 UTC | HN request time: 0.015s | source
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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.

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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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willmadden ◴[04 Feb 25 05:43 UTC] No.42928498[source]▶
What are you talking about? Their Bitcoin holdings more than doubled in value.
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hagbarth ◴[04 Feb 25 06:15 UTC] No.42928708[source]▶
Would that not be a bad thing when using it as legal tender? Deflation tends to be disastrous for the economy.
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floydnoel ◴[04 Feb 25 12:56 UTC] No.42931726[source]▶
deflation is fine for an economy. inflation is disastrous for an economy. the people in charge of the money printers are trying to keep you confused. don’t buy it.
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llamaimperative ◴[04 Feb 25 13:00 UTC] No.42931768[source]▶
LOL

I have $1,000.

I believe that tomorrow, my $1,000 will be worth $2,000.

Why would I ever spend my money?

Hence, economy freezes.

This is so plainly obvious to everyone except crypto zealots I literally gasped seeing your comment.

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zhoujianfu ◴[04 Feb 25 15:01 UTC] No.42933184[source]▶
Not arguing too hard but people do have to spend some money to live regardless… it could be said people are less careful with their money when they feel like it’s losing value, so they spend more and save less. Yes it results in more spending but on what?
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1. llamaimperative ◴[04 Feb 25 15:02 UTC] No.42933193{4}[source]▶
Yes, it would drive consumption toward the barest minimum to live and investment toward zero.

This is bad.

> Yet it results in more spending but on what?

Well near target inflation rates (which is a positive non-zero number) it results in a mix between consumption and investment.

This is good.

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2. tasuki ◴[04 Feb 25 17:43 UTC] No.42935864[source]▶
Are you saying low consumption is bad and high consumption is good?

High consumption has been improving the economy, and destroying the earth. I'm not saying I have the answers, but it's not so simple.

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3. llamaimperative ◴[04 Feb 25 18:44 UTC] No.42936764[source]▶
No, I'm saying that consumption at subsistence levels and investment opportunities having to overcome a deflation hurdle is bad.

It is very good that the default thing to do with excess money is invest it.

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4. pshan ◴[04 Feb 25 21:00 UTC] No.42938589{3}[source]▶
I'm not trying to strawman the opposing side, but I always found it ironic that many of the cryptocurrency proponents I talk to think that starting a business is amazing and innovation is important, but also hate inflation, which encourages those two things.
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5. llamaimperative ◴[04 Feb 25 21:40 UTC] No.42939222{4}[source]▶
They'd have to think at least one or two steps further than chart-go-up.