Bitcoin Crash May Push El Salvador Into Debt Default

El Pais reports:

As a result of the fall in global markets caused by the uncertainty of the war in Ukraine, rising inflation and the US Federal Reserve’s decision to raise interest rates, the price of the most popular cryptocurrency in the world has plummeted more than 50% from its all-time highs.

And with it, so too have the bonds of the government of El Salvador, which are trading at 40% of their original value, as investors start to doubt whether the country can meet its next debt payment.

Last September, Salvadoran President Nayib Bukele announced that El Salvador would become the first country in the world to accept bitcoin as legal tender, alongside the US dollar. Ratings agencies warned that the volatility of the cryptocurrency would impact the country’s already fragile public finances.

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