Indeed, the globe has more than 50 million billionaires. According to Bukele, his roughly 3.5 million social media followers are only allowed to purchase 21 million coins.
Bukele went on to say that each wealthy people in the globe can decide to purchase a minimum of one coin. There will not be enough for half of them, implying that a massive hike in value is only a question of how long.
The President of El Salvador’s post arises just after International Monetary Fund’s. The executive committee recommended that El Salvador renounce its use of Bitcoin (BTC) as legal tender.
Directors of the International Monetary Fund IMF warned in a recent study that the usage of bitcoin poses significant threats to monetary security, monetary transparency, and consumer rights, as well as fiscal accrued liabilities.
BTC’s Rise and Approval as Legitimate Money
As a matter of fact, El Salvador is fast recovering from the epidemic, which halted decades of growth. Outside consumption is high, and the inflows were robust. With the help of a payout under the Rapid Financing Instrument, approved in April 2020, the outbreak is well-managed.
The GDP will grow by roughly 10% in 2021 and 3.2 percent in 2022, while it will shrink by 7.9% in 2020. Security flaws in the government debt evolved amid such context. Consistent budget shortfalls and significant debt servicing requirements are causing enormous and growing finance requirements.
Truly, there is a 534 percent chance of a budget shortfall in 2021. For the year 2022, it will be approximately 5% of GDP. Over the current policies, the general public’s debt is expected to rise to about 96 percent of GDP in 2026.
In fact, the state has also recognized BTC as legitimate money starting September 2021. The use of cryptocurrencies as lawful cash. It poses significant threats to monetary and economic purity, finances, and client rights.
Creators further asked the government to limit the range of the Bitcoin Law by eliminating BTC’s position as legal money. Additionally, some board members were also concerned about the issuing of bitcoin-backed securities.
Negotiating with El Salvador
Indeed, the International Monetary Fund is negotiating a $1.3 billion loan for El Salvador. Bukele has become a vociferous cryptocurrency advocate after the nation recognized BTC as official cash in September. El Salvador has acquired a 1,500 BTC hoard throughout time by purchasing BTC at low prices.
Certainly, many people have opposed the nation’s decision to make cryptocurrencies official tender. The World Bank has stated that it will be unable to assist the government with said cryptocurrency’s deployment. The IMF has raised worries several instances prior to encouraging the nation to abandon BTC.
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