Alejandro Zelaya, El Salvador’s finance minister, believes the Bitcoin (BTC) experiment is proceeding as planned and that people shouldn’t anticipate results right away.
Strong Faith in Bitcoin
Alejandro Zelaya asserted in a July 27 interview that the use of Bitcoin as an official tender had made financial services available to a huge portion of the unbanked population. Additionally, he continued, it has increased tourism and attracted international investment.
Particularly now when the asset is in the midst of a bear market, not everyone concurs. The International Monetary Fund is one of the organizations that has questioned the project.
While acknowledging that the use of digital money as a legal tender is still in its infancy, Zelaya remained unfazed, saying: “For some, it’s something new and something they don’t entirely understand, but it’s a phenomenon that exists, is gaining ground, and will continue to be around in the coming years.”
Bitcoin Initiatives Still Developing
The government is still preparing to offer bonds backed by bitcoin, according to Bloomberg. Zelaya predicted that this would occur once the market situation improved. More incentives will be revealed soon, he noted, and the “Bitcoin City” ideas are still in the works.
“We won’t see results right away. Zelaya said that investors should be patient as no one goes to sleep destitute and magically becomes a billionaire overnight.
It has been demonstrated over time that reality exerts itself, he continued. In addition to believing that “new technologies are going to serve humans in the future,” Zelaya stated that he also believes in the conventional, international monetary system.
El Salvador Government Still Buying Bitcoin
On September 7, 2021, the legal tender measure was approved, and since then, Bitcoin has decreased 54% from its peak.
Current unrealized losses are $49.9 million, which is a difficult pill to chew given that the government used taxpayer funds to pay for the token purchases.According to calculations by Nayibtracker based on tweets from President Nayib Bukele, the government bought 2,381 Bitcoin with taxpayer money, which are currently worth around 50% less than what the government spent for them.
The majority of businesses and customers in El Salvador still favor using hard cash to pay for goods and services and send remittances, according to a survey by the U.S. National Bureau of Economic Research. The country has been pushed by the International Monetary Fund to decriminalize Bitcoin. The government and IMF are discussing an extended financial facility worth $1.3 billion, but no agreement has been reached as of yet.
Bitcoin recovers $24,000
Since BTC reached $24,000 for the first time in seven weeks early on July 29, the bitcoin and cryptocurrency markets are up today.
BTC was trading at $24,014 at the time of publication, albeit it was still up against significant resistance at these prices. The selling of cryptocurrency that many anticipated would result from a technical recession following two quarters of negative GDP in the United States has not happened.