BlockchainBitcoin may help El Salvador get IMF tranche: Central...

Bitcoin may help El Salvador get IMF tranche: Central Bank Governor

The introduction of bitcoin as the official currency will not interfere with El Salvador’s negotiations with the IMF for a $ 1.3 billion loan, says the head of the country’s central bank, Douglas Rodriguez. Bloomberg writes about it.

The cryptocurrency will get rid of its reputation as a speculative asset and prove its usefulness as a full-fledged medium of exchange, Rodriguez predicted in an interview.

He even expects Bitcoin’s well-known volatility to help the country surpass its 9% growth forecast for 2021.

“We don’t see any risks. Only positive risks, ”said Rodriguez. He predicts that “Bitcoin will become a payment system, a system for financial institutions.”

Bitcoin is just a means of payment.

El Salvador is highlighting Bitcoin’s prospects in talks with the IMF on a $ 1.3 billion Extended Funding Facility, Rodriguez said.

The Fund is expected to publish its review of the financial and economic condition of El Salvador as early as next month, which could serve as the start for a new round of discussions. Investors are closely following the protracted negotiations.

They are especially interested in the IMF’s reaction to some of the controversial decisions of President Naib Bukele, such as the dismissal of the chief judges and the granting of official status to Bitcoin.

El Salvador has a huge debt and must negotiate an agreement with the IMF to gain access to international markets next year.

“We have openly explained to the IMF: for us … bitcoin is just a means of payment,” explained Rodriguez.

International lenders are more skeptical

The IMF warned in July that the use of cryptocurrency poses financial and regulatory challenges, and Moody’s Investors Service said the adoption of Bitcoin threatens the country’s cooperation with the Fund.

According to the JPMorgan Chase & Co. Index, El Salvador’s government bond risk premium is 975 basis points as of October 18.

An additional risk for the country is the pension reform project. Although Rodriguez has pledged that she will not change the retirement age and will guarantee a “decent pension,” he said it is not yet known whether the reform will nationalize part or the entire system.

According to Rodriguez, cryptocurrency opens up wider access to financial services for the population, because three quarters of El Salvador’s citizens do not have a bank account.

He believes that the cryptocurrency will contribute to the inclusion in the financial system of those whom banks refuse to serve due to low income or high risk.

According to the President of Salvador Naib Bukele, the introduction of bitcoin will allow the country’s citizens to save about $ 400 million on international transfers.

Since the introduction of bitcoin last month, businesses in the El Salvadorian capital, from Starbucks and McDonald’s to hardware stores, have started accepting bitcoin to pay for their goods and services alongside the dollar, the country’s other official currency.

The central bank expects remittances from abroad to reach a record $ 6.3 billion this year. The increase in remittances could lead to a reassessment of the economic growth forecast to 10%.

Latest news

PlagiarismCheck’s research revealed that Google AI chatbot Bard can generate plagiarism

London, UK, May 31, 2023, ZEXPRWIRE, AI generators can provide an output based on your prompt by taking separate...

International Top Tech Conference EMERGE to debut in the UAE this May 28-29

EMERGE conference will take place in Dubai bringing a new perspective of the tech industry to the GCC –...

GPT Guru Launches IDO on SuiPad: Empowering AI-Language Models on a Global Scale

Ohio City, Ohio, May 24, 2023, ZEX PR WIRE, SuiPad, the leading launchpad for tier 1 projects on the...

Opside Incentivized Pre-alpha Testnet is Now Live

Hong Kong, May 24, 2023, ZEX PR WIRE, Opside launched its Incentivized Pre-alpha Testnet on May 24th at 0:00 UTC,...

Seeders Club: Uniting Investors for Stronger Diversified Opportunities

Dubai, UAE, May 23, 2023, ZEXPRWIRE, Seeders Club is breaking the mold of traditional investment structures with its unique platform that brings...

iGet Oz: Your Trusted Disposable Vape Supplier in Australia

Melbourne, Australia, May 23, 2023, ZEXPRWIRE, As the popularity of vaping continues to rise, finding a reliable and trustworthy supplier...

Must read

USD 19,500, the new key price of bitcoin to start an upward movement

Key facts: In the past, $19,500 has been a resistance...

Blockchain IDOs and Presales You Should Know About

There’s never a lack of new projects opportunities when...

The 10 rules to prepare for the crypto bear market by the savvy investor

While the Bitcoin and cryptocurrency market reached a record capitalization in...

Latin America’s E-commerce Giant Opens Up To Buying Bitcoin

Bitcoin (BTC) and cryptocurrencies are increasingly accepted every day for...

Binance Welcomes Arbitrum – Ethereum’s Second Layer!

For many months, the Ethereum (ETH) network has faced...

You might also like
Recommended to you