The government's crypto coffers have been cut in half, bitcoin adoption nationwide isn't really taking off, and the country has big upcoming debt payments.
Well before President Bukele got it in his head that bitcoin was a magical elixir that would bandage over longstanding economic vulnerabilities, the country was in a lot of trouble.
In a research note from JPMorgan, analysts warn that El Salvador's Eurobonds have entered "distressed territory" in the last year, andthat the cost to insure against a sovereign debt default is hitting multi-year highs. "In the past three, four months, what they've done is implement gasoline subsidies, which are super expensive," said Muci, who has expertise in economic diversification and public financial management, and has taken part in applied research projects for El Salvador, Venezuela, and Honduras.
All this comes as El Salvador faces imminent debt repayment deadlines in the billions of dollars, including anEl Salvador has been trying since early 2021 to secure a $1.3 billion dollar loan from the IMF — an effort thatover President Bukele's refusal to heed the organization's advice to ditch bitcoin as legal tender.
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