Nobel laureate Nouriel Roubini highly criticized El Salvador’s President Nayib Bukele over his stand on cryptocurrency. He argued that the latter deserves to be prosecuted for “bankrupting” the country with his Bitcoin move. U.Today reported that Bukele faced a backlash during the dramatic Bitcoin sale on Saturday. The “coolest dictator” is estimated to have lost more than USD 20 million in buying Bitcoin with Treasury funding. Earlier this month, financial services firm Moody’s has also raised concerns regarding the country’s bold Bitcoin bets after receiving the long-awaited USD 1.3 billion loan from the International Monetary Fund (IMF). As it has downgraded the credit rating of El Salvador.
Moody’s analyst Jaime Royche told Bloomberg that El Salvador’s financial profile would only deteriorate if the government increased its exposure to Bitcoin. El Salvador has USD 800 million in dollar-denominated bonds that will mature in January 2023. Yields on these bonds rose to 34 this month due to debt problems and uncertainty surrounding Bitcoin.
Suffering from the world’s most distressed sovereign debt, El Salvador is now partnering with blockchain developer Blockstream and Tether and Bitfinex’s parent company iFinex to create a Bitcoin-denominated “volcanic bond.” The part of the raised money will be used to build a libertarian mecca called “Bitcoin City”.
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