El Salvador’s adoption of bitcoin (BTC) as legal tender is working despite the over 50% losses the government has incurred on its purchases, the country’s finance minister said.
Alejandro Zelaya said in an interview with Bloomberg on Wednesday that bitcoin adoption has been beneficial to El Salvador’s unbanked population and also attracted tourism and investments. “It’s a phenomenon that exists and is gaining ground and will continue to be around in the coming years,” he said.
From September last year to the start of this month, El Salvador has purchased 2,301 BTC for a total of $103.9 million. As of the start of July, its portfolio was worth $46.6 million, a decline of over 55%. With the recent uptick in the crypto markets, the portfolio is now worth around $55.3 million.
El Salvador has faced criticism from mainstream financial institutions for its crypto adoption. In January, the International Monetary Fund (IMF) urged the country to discontinue bitcoin’s legal tender status.
“New technologies have shown how people in previous years were afraid of things like websites and digital business, but it’s been show through time that reality imposes itself,” Zelaya added.
El Salvador had plans earlier this year to introduce a $1 billion bitcoin bond but postponed it in March due to unfavorable market conditions. Zelaya said that the government will revisit this once conditions improve.
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