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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