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El Salvador abandons Bitcoin as legal tender

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Re: El Salvador abandons Bitcoin as legal tender

#561

Post by bogota »

dragonwriter wrote: post #404
portaouflop wrote: post #188

IMF gave them 1.4 billion to abandon the “experiment”: > The IMF made this a condition for a loan of 1.4 billion US dollars (1.35 billion euros). In December of last year, the IMF reached an agreement with President Nayib Bukele’s government on the loan of the stated amount to strengthen the country’s “fiscal sustainability” and mitigate the “risks associated with Bitcoin,” as it was described. —- I dislike cryptocur…

If you need to go to the IMF for a loan of ~3% of your GDP to mitigate the risks associated with Bitcoin, well, that's a pretty good sign that adopting Bitcoin as legal tender was a pretty disastrous failure.

Where did you draw that conclusion? Because nothing in the article or reality would lead one to believe that.

Re: El Salvador abandons Bitcoin as legal tender

#562

Post by bboygravity »

throwaway314155 wrote: post #150
bawolff wrote: post #116

Earlier quoted context omitted.

That's not really how that works. IMF can demand their loan be repaid in whatever currency they want. Its totally normal for international loans to be denominated in a currency other than the recipient's legal tender, particularly for high risk countries (although that is usually bad for the recipient)

They don't want Bitcoin in exchange. Seems entirely reasonable to me given how much the value of cryptocurrency fluctuates with low predictability. They could get paid in it one day and lose half the value the next.

Fiat currencies also can and have lost half their value plenty of times.

Actually I can't think of any fiat currency that hasn't at least halved in value?

Re: El Salvador abandons Bitcoin as legal tender

#563

Post by AnthonyMouse »

motorest wrote: post #497
roenxi wrote: post #423

Earlier quoted context omitted.

There are loans and there are "loans". This isn't El Salvador issuing bonds on the market, it is politics that comes with political conditions. That means they negotiated it and that means they got something in exchange for any leverage they could find.

> There are loans and there are "loans". This isn't El Salvador issuing bonds on the market, it is politics that comes with political conditions. That means they negotiated it and that means they got something in exchange for any leverage they could find. I think you need to take a pause and read what you wrote because there's some serious cognitive dissonance in your claims. The IMF is a fund put together and ran by…

> Even the most firebrand crypto bro is forced to acknowledge that crypto currencies like Bitcoin have a number of traits that renders them unusable as money, among which the most popular one is the core reason driving it's popularity: volatility.

This is essentially the other way around. It's volatile if it's predominantly used for speculation rather than as a currency, because "widespread use as a currency" is a big value sink that absorbs volatility. In other words, if more or larger countries used it as a currency it would be less volatile.

Re: El Salvador abandons Bitcoin as legal tender

#564

Post by bogota »

refulgentis wrote: post #537
pajko wrote: post #464

Earlier quoted context omitted.

The loan was not to mitigate the risk of the Bitcoin. They needed the loan for reasons. The IMF deemed the high involvement in Bitcoin risky for the loan. The IMF text has a "meanwhile": https://www.imf.org/en/News/Articles/2024/12/18/pr-24485-el-...

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Re: El Salvador abandons Bitcoin as legal tender

#565

Post by AnthonyMouse »

warkdarrior wrote: post #558
AnthonyMouse wrote: post #541

Earlier quoted context omitted.

The IMF are an arm of the US "diplomatic" apparatus. The charitable interpretation of how they operate looks like this: 1) A country is doing something the US doesn't like. 2) The country is in some trouble of their own making. 3) The IMF will come and bail them out if they would be inclined to start doing the things the US likes instead of the things it doesn't like. The uncharitable interpretation of "2)" is "the c…

So your claim is that US administration through the IMF is forcing El Salvador to drop Bitcoin as a national currency. The same US administration that proposed creating a "national digital asset stockpile"??!? (per https://www.cnbc.com/2025/01/23/trump-signs-executive-order-... )

The IMF agreement requiring them to do this was from December, i.e. the prior US administration.

Re: El Salvador abandons Bitcoin as legal tender

#566

Post by toenail »

agumonkey wrote: post #427
georgeecollins wrote: post #105

Earlier quoted context omitted.

There seems to be two concepts that are getting conflated. One concept is that BTC is a good investment. Historically that is undeniable. The other concept is that it is a good medium of exchange. I think that is not so true because 1) its neither cheap nor easy to buy a lot of things with it 2) a thing that goes up in value is not a good medium of exchange because people don't want to spend it, they want to hoard it…

Makes me wonder why the BTC original design tilted toward deflationary, since allegedly, 'satoshi' was trying to create currency, not speculation. Was it a two phase idea ? Attract people for 80 years as investment then when it's stable, use them as stupid coins ?

Deflation is the natural state of the economy because progress makes everything cheaper. We only have an inflationary system because central banks print money. Putting a central bank into code and micro-managing the money supply was not possible, so bitcoin is more like a commodity, like gold for example. Gold has worked just fine as a money for thousands of years.

Re: El Salvador abandons Bitcoin as legal tender

#568

Post by bogota »

whoknowsidont wrote: post #487
golergka wrote: post #428

Earlier quoted context omitted.

1. That's what stated by the IMF, and so far I don't see any reason to believe it's true. 2. That statement refers to government holding bitcoin as reserves. Which has little relation to use of Bitcoin in the country as legal tender.

>and so far I don't see any reason to believe it's true. Yeah I guess bitcoin is only allowed to go UP everything negative is always false! There's no way that virtual beanie-babies couldn't overcome the evil IMF!

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Re: El Salvador abandons Bitcoin as legal tender

#569

Post by toenail »

yalogin wrote: post #66
ptero wrote: post #17

That's heavy editorializing: El Salvador keeps buying the Bitcoin for its strategic reserve. Businesses and citizens can keep using it. But for getting an IMF loan, IMF (which, to put it mildly, doesn't like Bitcoin) required the end to Bitcoin legal tender status. Now the businesses are free to accept it or not instead of being required to accept it. That's all. The government plans to keep buying and using it.

Looks like a fair take to me. They are not forcing people to accept it anymore because it didn’t work. It was never supposed to work. Bitcoin tried for 15-20 years to find a use case but now it’s just an asset class like gold and nothing else, it will never be more than that.

> asset class like gold and nothing else, it will never be more than that

Lol, gold that can be teleported around the globe for fractions of a cent, yeah.. it sucks that bitcoin will never be more than that.

Re: El Salvador abandons Bitcoin as legal tender

#570

Post by stevenwoo »

starspangled wrote: post #73

It's interesting and nice to see how progressive and creative El Salvador has been. Some failures are perfectly understandable when one is willing to try new things. Their approach to crime is another thing that comes to mind that was lambasted and ridiculed by the "international community" and "experts". Yet in the space of a single decade they went from murder capital of the world to safer than New Zealand (in term…

They just offered to accept any criminal of any nationality (including American citizens) from the USA for a fee. https://www.nytimes.com/2025/02/04/us/politics/el-salvador-p... It's creative but hard to see as progressive, importing the idea of a for profit prison system from the USA.
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