‘Developing Economies’ Tracking El Salvador’s Bitcoin Moves with Interest
Conventional financial managers are still skeptical about El Salvador’s prospects of launching a new economic paradigm on the back of a forthcoming bitcoin (BTC) bond issuance. But other nations may be looking to the Central American nation with keen interest – hopeful of following suit if El Salvador’s move to adopt BTC as legal tender last year pays dividends.In a report from the Financial Times, Kevin Daly, a portfolio manager at the investment company Abrdn, was quoted as stating that “much to our surprise,” the Salvadoran finance minister Alejandro Zelaya had “said he had demand for up to USD 1.5bn for the bitcoin bonds” – which will be used to construct a new tax-free haven for international crypto advocates and pioneers.
Regardless, Daly – like many others quoted in the report – claimed that the issuance was “a misstep” on the government’s part, claimed that El Salvador was “muddling through” the issuance, and opined:
“If the [government] print[s] USD 1bn, we’re all going to shake our heads in amazement.”
The investment firms Meketa Investment Group and NEPC also opined that demand was “likely to be muted” in the institutional investment sector, “including pensions and endowments.” The firms claimed that “retail investors and cryptocurrency enthusiasts” would instead snap up “the lion’s share.”
As reported, Fitch already downgraded El Salvador’s sovereign credit rating from a score of B- to CCC. The firm claims that adopting bitcoin as legal tender could compromise a possible USD 1.3bn financing package from the International Monetary Fund (IMF).
However, Salvadoran President Nayib Bukele has doubled down on his bitcoin “bet” – and has taken an adversarial stance to such “cautionary” warnings from the IMF and other
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