In a tweet, Nayib Bukele, the president of El Salvador, announced that the country will buy back $1.6 billion worth of sovereign debt bonds. This comes after much criticism that El Salvador’s finances do not have adequate liquidity due to miscalculated investments in Bitcoin.
El Salvador is the first Latin American country to introduce Bitcoin as legal tender. Businesses in El Salvador are obligated to accept Bitcoin as means of payment, provided they possess the necessary technology.
Bukele has bought $52 million worth of Bitcoin. However, given that the price of crypto has greatly decreased due to crypto winter, El Salvador’s Bitcoin investments have lost more than 50% of value. Among others, The International Monetary Fund and JPMorgan have disapproved of Bukele’s purchases.
Regardless, Bukele now claims that El Salvador has sufficient means to make a purchase offer to all holders of Salvadoran sovereign debt bonds. And by the next January, the country will need to pay back an $800 million debt. Fingers crossed that Bukele knows what he is doing.