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- El Salvador’s latest Bitcoin purchase could put the country at odds with its $1.4 billion IMF loan agreement, which requires halting voluntary Bitcoin accumulation.
- Alongside Bitcoin, El Salvador has also boosted its gold reserves with a $50 million purchase—its first major gold acquisition since 1990.
On Sunday, September 7, El Salvador’s President Nayib Bukele announced that his country has purchased 21 Bitcoins, while marking the fourth anniversary of passing the BTC legal tender law. The latest purchase puts to rest the current discussions of the Latin American firm ditching BTC for its Gold purchases.
Celebrating the Fourth Anniversary of Bitcoin Legal Tender
The latest purchase is a symbolic reference to Bitcoin’s fixed supply cap of 21 million and reflects the government’s ongoing strategy to expand its reserves despite friction with international lenders. Data shows that since March last year, the Central American nation has been consistently adding 1 BTC per day to its holdings. According to official government data, El Salvador now holds a total of 6,313 BTC, valued at a massive $701 million.
The country’s latest Bitcoin purchase follows a recent move by its Bitcoin office to distribute holdings across 14 addresses. This development comes as a precaution against potential quantum-related risks, as mentioned in our previous story.
Following its latest Bitcoin purchase, El Salvador could face a challenge over its $1.4 billion loan agreement with the International Monetary Fund (IMF). This agreement requires public entities to halt voluntary accumulation. The move also appears to contradict a July statement submitted to the IMF, which affirmed that El Salvador’s public sector had stopped Bitcoin acquisitions in February in line with the loan terms.
Back then, President Nayib Bukele had stated that the Bitcoin acquisition “won’t stop now, and it won’t stop in the future.” In fact, last month, the Latin American nation announced that it is planning to set up its own “Bitcoin Bank” very soon, as reported by CNF.
El Salvador’s Gold Purchases Stir Debate
El Salvador’s recent gold purchases have stirred debate over why the country is preferring the yellow metal over ‘digital gold’, aka Bitcoin. Last week, the country’s central bank purchased a total of $50 million of physical Gold as part of its strategy to strengthen its reserves.
The latest purchase leads to a 32% surge in the country’s Bitcoin holdings, moving from 44,106 troy ounces to 58,105 troy ounces, worth a massive $207 million. Interestingly, this is the first big purchase of the yellow metal in over three decades since 1990. The central bank referred to the latest purchase, noting:
The implementation of this strategy is possible thanks to the strengthening of the Central Reserve Bank’s assets in recent years … resulting from the various policies implemented by President Nayib Bukele.