The president of El Salvador has announced on Twitter that his country managed to pay back the USD 800 million Eurobond which represented part of the debt due to be repaid in January 2023.
El Salvador, the country that previously accepted Bitcoin as legal tender, recently passed a law to enable the Volcano Bond, which is backed by Bitcoin.
By leveraging the Volcano Bond, the Central American country wishes to repay its national debt, design an infrastructure for Bitcoin mining, and sponsor the construction of Bitcoin City. The presidential announcement followed an important counteraction against the country’s bet on Bitcoin.
The country received opposition from even the IMF (International Monetary Fund) on the topic of making Bitcoin a legal tender, the institution arguing that this initiative will bring huge volatility. Furthermore, when the news of FTX filing for bankruptcy and its resulting scandal spread, the crypto industry had to undergo serious side effects, with Bitcoin dropping over 50 per cent.
All these concerned investors in regard to El Salvador’s creditworthiness and ability to make its next repayment scheduled for the 24th of January 2023. Despite the market experiencing a downfall, El Salvador succeeded in repaying its debt of USD 800 million and the added interest.