El Salvador

El Salvador plans to repurchase about $1.6 billion in sovereign bonds at market prices, part of a plan to cut down on debt and stave off fears of a default, President Nayib Bukele said on Tuesday, the Wall Street Journal reported. Bukele said on Twitter that his government sent two bills to congress to secure funds for “a transparent, public and voluntary” repurchase offer for bonds maturing in 2023 and 2025 at market prices in about six weeks. “El Salvador has enough liquidity” to meet debt payments and to buy all of its own debt up to 2025 in advance, Bukele wrote.

El Salvador's bet on bitcoin was slashed on Tuesday by half as the more than $100 million in the country's publicly disclosed purchases dropped more than 50% in value, Reuters reported. The 10 purchases announced by President Nayib Bukele via Twitter have a market value of just over $51 million, with the biggest single trade - 420 coins at more than $59,000 per coin - down almost 63%. Bukele has said on Twitter at least four times that El Salvador has bought a "dip", a term used by traders to mean they took advantage of a price dislocation that resets for a quick gain.

President Nayib Bukele’s Bitcoin gambit is becoming onerous for El Salvador, but that isn’t stopping him from adding to his stockpile, Bloomberg News reported. The impoverished Central American country has bought 2,301 Bitcoins since making it legal tender in September, based on Bukele’s announcements on Twitter, including yesterday’s 500-coin purchase as the price fell below $31,000. The tokens are worth $74 million now, well below the $103 million Bukele paid for them, according to calculations by Bloomberg.

Salvadoran bond spreads to U.S. Treasuries spiked on Monday by the most in nearly seven weeks a day after Congress approved a monthlong extension of emergency measures President Nayib Bukele has said are necessary after a surge of gang killings, Reuters reported. Human rights groups say the measures infringe civil liberties and Bukele's critics say his control over Congress and the Courts has brought a backsliding on democracy. Bond prices have been on a downward swing for most of the past year, since Bukele's first overt moves to oust critics.

El Salvador is seeking support from cryptocurrency exchange Binance for its implementation of bitcoin as legal tender and the issuance of bitcoin bonds, the Central American country's ambassador to the United States said on Wednesday, Reuters reported. Binance Chief Executive Officer Changpeng Zhao is visiting El Salvador and plans to meet President Nayib Bukele on Thursday, ambassador Milena Mayorga told reporters. Mayorga said Zhao's visit was a vote of confidence in Bukele's decision to adopt bitcoin as legal tender last September, as well as its plan to issue bitcoin-backed bonds.

President Nayib Bukele’s unorthodox policies -- from ousting top court judges to trading Bitcoin on his phone with public money -- have heightened the nation’s perceived riskiness for investors and ratings agencies, Bloomberg News reported. “The weakening of institutions and concentration of power in the presidency have increased policy unpredictability, and the adoption of Bitcoin as legal tender has added uncertainty about the potential for an IMF program that would unlock financing for 2022-2023,” Fitch said in its statement.

The International Monetary Fund's (IMF) board on Friday said it continued to have strong engagement with El Salvador and that no determination had been made on whether it could lend to the country which has made the cryptocurrency bitcoin legal tender, Reuters reported. El Salvador became in September the first country to make bitcoin a legal tender, alongside the U.S. dollar. The IMF has pressed El Salvador to backtrack on the bitcoin move, citing financial, economic and legal concerns.

The bonds backed in bitcoin (BTC) that the Government of El Salvador will launch will be available in February and March 2022. This was confirmed on January 4, by the Minister of Finance, Alejandro Zelaya, CVBJ.biz reported. The Salvadoran official hopes that the strategy will be successful. Recall that, as reported by CriptoNoticias in November, the Central American country seeks to raise USD $1 billion through these bonds. The money will be used both to build the Bitcoin City and to acquire more BTC (to date, the nation has 1,391 bitcoins according to publicly available information).

El Salvador intends to issue the world’s first sovereign Bitcoin bonds and build Bitcoin City, which will be free of income, property and capital gains taxes, President Nayib Bukele announced in the beach town of Mizata to a crowd of cheering Bitcoin enthusiasts, Bloomberg News reported. El Salvador plans to issue $1 billion in tokenized U.S.-dollar denominated 10-year bonds to pay 6.5% via the Liquid Network, according to Samson Mow, chief strategy officer of Blockstream.