Fact Checked by 
Central American nation El Salvador has found itself criticized by financial watchdogs for its Bitcoin (BTC) adoption, but investors seemingly appreciate it.
On Monday (Oct. 7) bonds issued by El Salvador rallied after the country asked holders of dollar-denominated transactions to tender their notes. The government is offering to buy back the notes from investors for cash to restructure debt.
The El Salvador economy
El Salvador’s announcement clearly explains that the offer is “part of a refinancing transaction to realize savings and promote certain conservation and sustainability efforts of El Salvador.” The country seems to be taking a long-term approach to its financial planning, with its president, Nayib Bukele, having recently announced that its 2025 budget will be debt-free.
Not only are the 2025 budget expenses covered without new debt. Bukele further claimed that expenses related to debt accumulated in the past will also be covered:
“El Salvador will no longer spend more than what it produces each year. We won’t even borrow money to pay down interest on the debt that we inherited. We will cover even those payments from our revenue.”
El Salvador is famously the world’s first country to adopt Bitcoin as its legal tender back in 2021 and continued to take flak from financial regulators ever since. Just days ago, the International Monetary Fund (IMF) urged El Salvador to strengthen its oversight over Bitcoin transactions in the country.
IMF spokesperson Julie Kozack said at the time that El Salvador should limit both its Bitcoin adoption and the public sector’s exposure to it. In mid-May, data released by the country’s “Bitcoin Office” showed that El Salvador could hold up to 5,750 BTC.
Since 2021, the nation has mined over 465 BTC by harnessing the geothermal power generated from the Tecapa volcano. More recent data shared by the Bitcoin Office shows that El Salvador holds nearly 5,897 BTC — worth over $365 million as of press time.
