El Salvador Pays Back $800 Million On External Bond Amidst Bitcoin Boom

Accoridng to the latest reports, it seems that El Salvador’s President, Nayib Bukele, said Monday his country has paid back $800 million on an external bond. This managed to happen despite concerns last year the country would default due to its “bitcoin bet.”

Investors holding the Eurobond have been paid out after the country completed its transfer of funds to international creditors. This way, the country offers a rebuttal of sorts to criticisms levied at the president’s regime.

“In the past year, almost every legacy international news outlet said that because of our ‘bitcoin bet,’ El Salvador was going to default on its debt by January 2023,” Bukele tweeted Monday. “Well, we just paid in full, $800 million dollars plus interest.”

Last year, as the online publication Blockworks notes, El Salvador offered to buy back some of its debt as part of a repurchase plan in a bid to counter criticisms the country would default.

A couple of weeks ago, we noted that El Salvador’s Bitcoin transactions during May soared by over four times year-to-year. However, fiat payments still represent the broad majority of transactions in the Latin American nation, a report by Reuters states.

El Salvador became the globe’s first country to announce and pass regulation earlier this month that makes Bitcoin legal tender. This means that the crypto coin can be used to pay federal taxes, be accepted by companies, and not be contingent upon capital gains taxes.

According to the report, “the monthly BTC remittances of under $1,000 totaled $1.7 million last month compared to $424,000 the previous year,” we were reporting back then. 

More than that, “Transfers of this size are typically used as a proxy to establish the transfer numbers from Salvadorian ex-pats working outside the country. In 2019, almost $6 billion – or one-fifth of El Salvador’s GDP – comprised remittances, which showcases one of the highest ratios in the world, as per World Bank.”