U.S. Congressman Matt Gaetz has introduced a bill to allow federal income taxes to be paid with bitcoin. Inspired by El Salvador’s success with the cryptocurrency, the lawmaker believes this move will modernize the U.S. tax system, promote innovation, and maintain America’s technological leadership. Lawmaker Proposes Bill to Allow Federal Income Taxes to Be Paid […]
Bitcoin News
Ark CEO Cathie Wood Talks Bitcoin With El Salvador’s President — Applauds His Vision for BTC Hub
Cathie Wood, CEO of asset management firm Ark Invest, recently met with El Salvador’s President Nayib Bukele and discussed bitcoin. She praised his progressive approach to economic and educational reforms. “President Bukele’s determination to transform El Salvador into a hub for the bitcoin and AI communities — two of the most significant economic and technological […]
Bitcoin News
Bitcoin Reportedly Hindering El Salvador’s Credit Opportunities With the IMF
Bitcoin and its adoption by the government of El Salvador have become a negative factor in the country’s negotiations with the IMF. According to reports, the institution demands changes to El Salvador’s Bitcoin law to receive a .4 billion credit line for expediting public debt payments and other obligations. El Salvador’s Bitcoin Allegiance Is Getting […]
Bitcoin News
Latam Insights: El Salvador’s Bitcoin Portfolio Goes Black, Brazil Brings Digital Currency Talk to G20
Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: The portfolio of bitcoin investments of the Salvadoran government went into black numbers, Brazil will discuss using digital currencies for financial transfers in the Group of 20 (G20), and Venezuela alleged Exxonmobil financed Essequibo’s ballot opposition with cryptocurrency.
El Salvador’s Bitcoin Investments Go Black
The bitcoin investment strategy of El Salvador has started to pay its dividends, as the country’s holdings went into black numbers with the recent rise in the price of bitcoin. President Nayib Bukele shared a post on social media explaining that the country had finally reached this point after being ridiculed and targeted by hit pieces due to their calculated losses while making these investments.
However, Bukele stated that the country had no intention of selling the bitcoin it owns, estimated to be around 2,381 BTC by different trackers. Bukele also called news sites to “issue retractions, offer apologies, or, at the very least, acknowledge that El Salvador is now yielding a profit.”
Brazil to Discuss Digital Currency Themes at G20
Brazil intends to bring a digital currency agenda as the new president of the Group of 20 (G20). Roberto Campos Neto, president of the Central Bank of Brazil, detailed that the country will discuss the use of digital currencies and the benefits it can bring to the economies of the bloc.
Campos Neto stated:
Digital currencies can greatly reduce the costs of international transactions. The G20 will work to improve the settlement and governance of international transfers.
Campos Neto explained these cost reductions would come as a consequence of the monetization of the private data of users, touting programmability as one of the advantages of this new tech. “It is a technology that is here to stay. It democratizes,” he concluded.
Venezuela Alleges Exxonmobil Financed Essequibo’s Ballot Opposition Using Crypto
The government of Venezuela reported that Exxonmobil, one of the biggest oil and gas companies, tried to influence the result of the recent Essequibo ballot in the country, which intended to determine the opinion of the citizens about the Guyana-administered zone, using crypto. Venezuelan Attorney General Tarek William Saab issued 14 arrest warrants related to this investigation, including opposition members outside the country like former interim President Juan Guaido.
The national prosecution alleges the funds used to influence the election were introduced to the country by two U.S. nationals, Damian Merlo and Savoi Jandon Wright, who used cash and USDT, a dollar-pegged stablecoin, to funnel the funds into the country while avoiding financial controls.
Exxonmobil, having a significant presence in the Esequibo region, denied any attempt to finance Guyana’s activities in this conflict. Darren Woods, CEO of Exxonmobil, stated:
We are limiting our role to the area of our expertise, which is basically helping them (Guyana) to responsibly develop their resources.
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Salvadoran Vice President Felix Ulloa: Bitcoin Adoption Fueled El Salvador’s ‘Rebirth’
The Salvadoran vice president, Felix Ulloa, has given his opinion about the relationship between the “rebirth” of the country and the adoption of bitcoin as legal tender in a recent interview. For Ulloa, bitcoin has been an important factor, alongside others, in this revamp of El Salvador, drawing crypto-related investments and tourists to the country.
Salvadoran Vice President Felix Ulloa: Bitcoin Enthusiasm Attracted Investors
The Salvadoran vice president Felix Ulloa linked the positive developments in the country’s economy and the adoption of bitcoin as legal tender. El Salvador became the first country to adopt bitcoin as legal tender back in 2021, under the guidance of Salvadoran president Nayib Bukele.
While some multilateral organizations like the International Monetary Fund (IMF) questioned this, heavily criticizing Bukele’s actions and calling on the country to drop the plan, Ulloa stresses that this has had a positive effect on the country.
In a recent interview, Ulloa told Forbes:
The enthusiasm that started in the sphere of the digital economy, with bitcoiners, where El Salvador, having positioned itself as the first country to adopt a cryptocurrency as legal tender, was at the forefront and attracted many investors who are in fact installed in Salvador.
Tourism, Bitcoin, and Development
For Ulloa, another industry that has seen a sharp recovery after the Covid-19 pandemic has been tourism, with this increase being linked to the country’s new security policies and bitcoin.
Bitcoin as legal tender makes it easy for tourists who enter the country to pay for goods and services without worrying about currency exchanges, Ulloa stressed.
President Bukele had linked bitcoin and the recovery of the tourism industry before. In August 2022, Bukele stated:
Only a handful of countries have been able to recover its tourism to pre-pandemic levels. And that’s international tourism, so the reasons behind it are mostly bitcoin and surf.
However, Ulloa takes this link even further, explaining that these two (tourism and bitcoin) are part of the recovery that El Salvador experienced during Bukele’s administration. He detailed:
Without a doubt, tourism and the use of digital currencies go hand in hand and are a sign of that future and the rebirth of our country.
What do you think about Felix Ulloa’s thoughts on the influence that adopting bitcoin as legal tender has had on the economic recovery of El Salvador? Tell us in the comments section below.
Tether Expands Investments in Green Bitcoin Mining, Invests in El Salvador’s Volcano Energy
Following the company’s announcement that it will build a sustainable Bitcoin mining operation in Uruguay, the stablecoin issuer Tether has disclosed its investment in a Salvadoran bitcoin mining operation called “Volcano Energy.”
Tether Backs Volcano Energy
Tether is increasing its investments in recent times, having announced a mining project in Uruguay and revealing an investment in the Georgia-based payment processing company Citypay.io. The stablecoin company, responsible for the largest stablecoin asset by market cap (USDT), disclosed on Monday that it participated in a billion investment in Volcano Energy, which is backed by Max Keiser.
The funds obtained by Volcano Energy will be utilized for a 241-megawatt (MW) renewable energy mining facility in Metapán. The data center will harness photovoltaic solar and wind power to fuel the company’s operations. Tether and Volcano Energy anticipate a substantial increase in the proportion of sustainable bitcoin mining in the forthcoming years.
🌋 Energy 🇸🇻 https://t.co/dqvly29BUo
— Josue Lopez 🇸🇻🇨🇭 (@JosueLopezGal) June 3, 2023
“Volcano Energy represents one of the most ground-breaking and strategic initiatives we are investing in and we look forward to working alongside Josue Lopez and his team to make El Salvador a global force in renewable energy production,” Tether’s CTO Paolo Ardoino said on Monday.
Josue Lopez, CEO of Volcano Energy, stated on Monday that 52% of the existing bitcoin mining operations utilize sustainable and renewable energy sources. “We believe this percentage will significantly increase in the coming years, through important investments like ours,” Lopez said. “Not only is ‘Volcano Energy’ important for the future of bitcoin resiliency, it’s also an important sign of the new crucial role that El Salvador plays in the global tech environment.”
What do you think about Tether investing in El Salvador’s Volcano Energy? Share your thoughts and opinions about this subject in the comments section below.
Latam Insights: Bolivia Sells Gold for Dollars, Argentina Bans Fintech Crypto, Fitch Upgrades El Salvador’s Credit Rating
Welcome to Latam Insights, a compendium of the most relevant crypto and economic development news from Latin America during the last week. In this issue, Bolivia passes a law to sell gold for dollars, the Central Bank of Argentina bans fintech companies from using crypto, and Fitch improves El Salvador’s credit rating.
Bolivia Passes Law to Sell Gold for Dollars
Bolivia recently passed a law that will allow the government to sell up to 50% of its gold reserves in dollars, easing the internal scarcity of dollars. The law gives faculties to the government to negotiate the sale of 22 tons of gold out of the almost 44 available in the local reserves.
The initiative had been presented back in 2021, but it was only recently rescued and passed by the Congress, which is dominated by the party of Bolivian president Luis Arce. Jorge Richter, a presidential spokesperson, explained the objective of the swift approval of the law. He stated:
The country has a tool so that these events and situations of the past days that we have known are not repeated, difficulties in the production of North American currency.
Almost all Bolivian banks had previously established a 0 daily withdrawal limit for their users, and the Central Bank of Bolivia had to organize direct sales to satisfy the local demand for foreign currency.
Central Bank of Argentina Bans Fintech Companies From Using Crypto
On May 4, the Central Bank of Argentina issued a communication banning certain fintech providers from using cryptocurrency assets or offering services linked to digital assets or other assets “not regulated by the competent national authority and authorized by the Central Bank of the Argentine Republic.” to their customers.
The measure would only affect fintech companies that provide direct payments accounts, including Ualá, MercadoPago, Personal Pay, DolarApp, Nubi, and MODO, among others. Bitcoin Argentina, a national NGO, rejected this measure, stating that it “is surprising and unconsulted. It is not understood what objective the central bank is seeking by prohibiting an activity that today is entirely satisfactory and useful for the clients of the local exchanges.”
Fitch Ratings Improves El Salvador’s Credit Rating
Fitch Ratings, one of the big three credit rating agencies, upgraded the credit rating of El Salvador, even with the adoption of bitcoin as a legal tender. Fitch upgraded El Salvador’s rating from CC to CCC+, stating that this was the consequence of “successful completion of the exchange and payment of significant global bond write-downs early in the year, and reflects Fitch’s view that another event of default no longer appears likely.”
Salvadoran president Nayib Bukele celebrated the change, explaining he could not wait for Fitch wait to “upgrade it even more, once we announce our budget surplus for 2024.”
What do you think about the developments in Latin America this week? Tell us in the comment section below.
IMF Report on El Salvador’s Bitcoin Adoption: Risks Averted, but Transparency Needed
According to a recent mission statement published by the International Monetary Fund (IMF), El Salvador has adopted bitcoin as legal tender and has avoided risks so far. The IMF states that the risks have not materialized due to the limited use of bitcoin. However, the United Nations financial agency warns that if its legal tender status drives growth, it could pose risks to the country’s “financial integrity and stability.”
IMF Discusses El Salvador’s Bitcoin Legal Tender Status: Limited Use Averts Risks, but Growth Could Fuel Concerns
On Feb. 10, 2023, the International Monetary Fund (IMF) released a concluding mission statement regarding El Salvador and its economy. The IMF visited San Salvador from Jan. 30 to Feb. 8 for the 2023 Article IV consultation. In the statement, the IMF discusses bitcoin adoption in El Salvador and states that “risks should be addressed.” Currently, the IMF acknowledges that the risks it raised in 2021 have mostly been avoided.
“While risks have not materialized due to the limited bitcoin use so far—as suggested by survey and remittances data—its use could grow given its legal tender status and new legislative reforms to encourage the use of crypto assets, including tokenized bonds (Digital Assets Law),” the IMF’s researchers detail. “In this context, underlying risks to financial integrity and stability, fiscal sustainability, and consumer protection persist, and the recommendations of the 2021 Article IV remain valid.”
El Salvador declared bitcoin as legal tender in September 2021, and since then, growth has been sluggish. The country has made regular bitcoin investments and added it to its treasury. However, the IMF emphasizes the need for more transparency in the government’s bitcoin purchases and the Chivo wallet, which is state-owned. “Greater transparency regarding the government’s bitcoin transactions and the financial status of the state-owned bitcoin wallet (Chivo) is crucial, particularly to evaluate underlying fiscal contingencies and counterparty risks,” the agency noted.
Besides the risks associated with bitcoin, the slow pace of its adoption, and adverse economic shocks, the Salvadoran economy grew rapidly last year, according to the IMF. The IMF estimates that the economy expanded by 2.8% in 2022. Amid mounting economic vulnerabilities in 2022, the IMF asserts that the Salvadoran Treasury still lacks access to international capital markets.
The IMF identifies two major issues that the Salvadoran government could address: implementing better Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) policies and increasing fiscal transparency.
What are your thoughts about the IMF’s recommendations for the country’s financial stability and integrity? Let us know what you think about this subject in the comments section below.
MicroStrategy Follows El Salvador’s Lead As It Buys Bitcoin Dip
For those who can afford it, the recent dips in Bitcoin price have been nothing more than an opportunity to buy the digital asset at a discounted price. This has certainly been the case for El Salvador and now MicroStrategy, as both these entities have moved swiftly to take advantage of the price dip to increase their holdings.
El Salvador had quickly snapped up another 100 BTC when the price had fallen to ,000, with the president once again saying that the country got the coins at a discount. MicroStrategy, the publicly traded firm that holds the largest amount of bitcoin on its balance sheet, followed in the footsteps of El Salvador. This time buying up 4 million worth of BTC.
Related Reading | Report Shows Institutional Investors Are Abandoning Bitcoin For Altcoins
MicroStrategy Deepens Bitcoin Bet
MicroStrategy has renewed its promise to keep adding bitcoin to its balance sheet with its latest purchase. The firm which is headed by Bitcoin maximalist Michael Saylor announced that it had bought even more bitcoins to add to its already impressive holdings. MicroStrategy’s latest purchase consisted of a 4 million buy, which amounted to 7,002 BTC added to its balance.
This recent purchase brought the total of MicroStrategy’s bitcoin holdings to a whooping 121,044 coins. The firm bought the digital asset at an average of ,187 per coin, well below its record K high at the beginning of November.
MicroStrategy has purchased an additional 7,002 bitcoins for ~4.4 million in cash at an average price of ~,187 per #bitcoin. As of 11/29/21 we #hodl ~121,044 bitcoins acquired for ~.57 billion at an average price of ~,534 per bitcoin. $MSTRhttps://t.co/OA8VWG1bZX
— Michael Saylor (@saylor) November 29, 2021
BTC recovers above K | Source: BTCUSD on TradingView.coms
MicroStrategy has gradually filled its coffers with bitcoin and has so far spent approximately .57 billion in total. Despite bitcoin’s drop from its all-time high, the firm continues to remain in profit with an average price of ,534 per bitcoin.
Companies Betting Big On Bitcoin
MicroStrategy is not the only company that has thrown its hat in the ring with bitcoin, although it holds the largest volume of all publicly traded companies. Electric vehicle maker Tesla had also announced that it holds bitcoin on its balance sheet. Tesla which is headed by another Bitcoin maximalist in the person of Elon Musk holds 48,000 BTC on its balance sheets, currently worth around .99 billion.
Related Reading | El Salvador Buys Bitcoin Dip As Omicron Variant Ravages Market
Galaxy Digital is headed by Mike Novogratz, an outspoken crypto bull that has reiterated the potential of bitcoin numerous times. The firm also holds16,402 bitcoins on its balance sheet, 6.69 million in today’s value.
Square Inc. headed by Twitter boss, Jack Dorsey holds 8,027 BTC, while Marathon Patent Group holds around 0.7 million in bitcoin (4,813 BTC).
A recurring theme around all these companies is that no matter when they entered the market, they are all in profit by at least 100% of the value the bitcoins cost at the time of purchase.
Featured image from Forbes, chart from TradingView.com
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2.1 Million Salvadorans Actively Using Chivo Wallet, El Salvador’s President Claims
Nayib Bukele, El Salvador president, has claimed that 2.1 million citizens are using the new government-backed Chivo cryptocurrency wallet. In a tweet, he implied the apparent success of Bitcoin in the country.
El Salvador recently adopted bitcoin as a legal tender on September 7, 2021, being the first country to do so.
Related Reading | Just 10 Days After El Salvador’s “Bitcoin Day”, President Bukele Confirms 1.1 Million Citizens Have Chivo Wallet
On Saturday afternoon, president Nayib Bukele shared this update with his 2.9 million Twitter followers. He claimed that Chivo “now has more users than any bank in El Salvador” after just three weeks in operation. He also said that despite Chivo not being a bank, it already has more users than any bank in El Salvador and that it is only a matter of time before the wallet’s adoption surpasses all banks in El Salvador combined.
2.1 million Salvadorans are ACTIVELY USING @chivowallet (not downloads).
Chivo is not a bank, but in less than 3 weeks, it now has more users than any bank in El Salvador and is moving fast to have more users that ALL BANKS IN EL SALVADOR combined.
This is wild!#Bitcoin🇸🇻
— Nayib Bukele 🇸🇻 (@nayibbukele) September 25, 2021
El Salvador’s Chivo Wallet
The state-issued wallet launched in early September as El Salvador officially recognized Bitcoin as legal tender. Chivo enables individuals and businesses to send and receive payments in Bitcoin (BTC) or dollars (USD) from anywhere in the world. Merchants must offer the ability to use both currencies. However, some merchants saying they would rather lose sales than accept bitcoin payments.
Related Reading | El Salvador’s Chivo And Bitcoin Adoption In Mindblowing Facts And Stats
The wallet is available on both Android and Apple devices. Latin American cryptocurrency exchange Bitso is the core service provider for the Chivo wallet. There are now over 200 bitcoin ATMs in El Salvador, the third-largest number of ATMs after the U.S. and Canada.
President Bukele’s goal is 2.5 million Salvadorans, which is approximately 39% of the population. As an incentive, the government offers in bitcoin when people download the wallet app.
Bitcoin Adoption In The Country
President Bukele’s latest update implies that the Bitcoin Law is being received positively by the citizens of El Salvador. However, many protestors have taken the streets to assert their disapproval.
As reported, some protesters even set fire to a brand-new Bitcoin machine, while others held signs reading “Bukele Dictator”. According to the protesters, the president is using authoritarian means to tighten his grip on power. They gathered in the capital San Salvador on the 200th anniversary of the country’s independence, with placards that read “No to Bitcoin” and “Respect the Constitution”.
BTC trading at .2K | Source: BTCUSD on TradingView.com
Apart from the protests, there were reported glitches during the initial rollout. In the first week, one machine completed only three successful transactions out of many. A lot of Salvadorans also do not trust bitcoin because of its volatility.
According to a recent survey from Sherlock Communications, an agency in Brazil, 54% of Salvadorans are not familiar with Bitcoin.
Featured image from Nairametrics, Chart from TradingView.com