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IMF gave them 1.4 billion to abandon the “experiment”: > The IMF made this a condition for a loan of 1.4 billion US dollars (1.35 billion euros). In December o

IMF gave them 1.4 billion to abandon the “experiment”: > The IMF made this a condition for a loan of 1.4 billion US dollars (1.35 billion euros). In December of last year, the IMF reached an agreement with President Nayib Bukele’s government on the loan of the stated amount to strengthen the country’s “fiscal sustainability” and mitigate the “risks associated with Bitcoin,” as it was described. —- I dislike cryptocurrencies as much as the next guy but this was clearly something else than a failure of the currency itself

kristjansson 2y ago
Conversely if that’s all it takes to induce them to give up it tells you something about the benefits they felt were accruing from BTC.
- syndicatedjelly 2y ago
  Is that really the message?
- wongarsu 2y ago
  Keep in mind that El Salvador is tiny. This is like 14 days of El Salvador's entire GDP. Or scaled to GDP, it's like giving a $1.2 Trillion loan to the USA.
- hammock 2y ago
  El Salvador has been in the IMF debt trap since 1949. It’s not just a billion dollar loan we’re talking about. Although scaled to GDP it’s quite a lot
- olalonde 2y ago
  They're not giving up on Bitcoin. In fact, it's likely that they'll use the loan to buy more Bitcoin. https://www.reuters.com/markets/currencies/el-salvadors-bitcoin-wallet-be-sold-or-discontinued-after-deal-with-imf-official-2024-12-19/ https://www.reuters.com/markets/currencies/el-salvadors-bitc...
  - genem9 2y ago
    They already are. Just bought 20
  - taurknaut 2y ago
    Who are they possible gonna offload that bitcoin on to? Their neighbor? That doesn't strike me as a socially acceptable thing to do.
    - olalonde 2y ago
      There's a deep and liquid market for Bitcoin - El Salvador isn't even a major holder in the grand scheme of things. I don't see what's socially unacceptable about selling Bitcoin to a willing buyer; it's simply a transaction between two parties, no different from trading foreign currency like USD. There's also no indication that they plan to spend or trade their Bitcoin anytime soon.
      - taurknaut 2y ago
        > i don't see what's socially unacceptable about selling Bitcoin to a willing buyer Well you're accepting payment for something people are expecting to hold value. Bitcoin only has value to a small subset of people with money. I'd definitely judge you for selling it if you have options for financial transactions via SWIFT.
awnird 2y ago
If bitcoin was such a success then why did they need an enormous loan?
- ToValueFunfetti 2y ago
  If the USD was such a good currency, why does the US operate at a deficit?
  - JumpCrisscross 2y ago
    > If the USD was such a good currency, why does the US operate at a deficit? If the U.S. needed a bailout, the dollar would become a trash currency.
  - Arainach 2y ago
    A deficit is not a loan. The USD and the historical strength and faith on the US allowed the US to offer its own securities, not ones pwned by and with terms dictated by external entities.
    - 2030ai 2y ago
      It smells, looks and quacks like a loan.
      - __MatrixMan__ 2y ago
        Smells more like a tokenomics scheme than a loan to me.
    - whimsicalism 2y ago
      the US borrows money. sure it can monetize its own debt at any time but that would have its own set of very high costs
  - fsckboy 2y ago
    >why does the US operate at a deficit? are you talking about a trade deficit (the US operated at a trade deficit virtually the entire time it grew from 13 former colonies to the post WWII economic colossus. Lending money to a growing economy so it can turn around and purchase the equipment you are selling which it will use to be more productive is the secret sauce of a growing economy) or are you talking about a budget deficit? many countries around the world operate with budget deficits; "socialist" governments generally have higher deficits as they spend to maintain living standards whether the economy justifies it or not. The size of the deficit (they will grow all the time) does not matter, what matters is "as a %age of GDP". none of this, btw, has much to do with monetary policy, the maintenance of the currency. "strong" or "weak" currency really makes no difference. The strength/weakness of the currency how the books are balanced after the fact of what has happened in the actual economy. A country with a strong currency will find imports inexpensive, and will have trouble selling its goods, and citizens will be incented to buy imports. A country with a weak currency will have difficulty importing goods, but will have less trouble exporting. It's the currency that balances these books.
stephen_g 2y ago
Despite that interference, from everything I’ve read though it’s hard to describe the bitcoin experiment as anything else than a massive failure…
- mlcrypto 2y ago
  Massive success actually for anyone holding. Did you forget the price is $100k?
  - aksss 2y ago
    What does that mean? USD value decreased that much and bitcoin proved itself as an asset with tangible value (like gold?), or did value of bitcoin itself rise? I’m not a currency guy, so I don’t pretend to know crap, it’s a real question, not rhetorical.
    - skulk 2y ago
      It means that if you bought under $100k, you are no longer the biggest fool. Bitcoin is completely unworkable as an everyday currency and this this is due to multiple factors. Any attempt to address these shortcomings ends up slowly[0] re-inventing the modern financial system and its various systems of trust. People who try to convince you otherwise are simply in search of a bigger fool, since they bring up the USD value of bitcoin. [0]: but also too quickly, hence all the breaches and 8-figure heists
    - mindcandy 2y ago
      Compared to the dollar over the past five years… The dollar down vs itself by 20ish percent. The median home price is up 30ish percent. Oil is up 45ish percent. Gold and the SP500 are each up 80ish percent. Bitcoin is up 1000ish percent. If you snooze through the day-by-day, season-by-season noise, the volatility of Bitcoin is a fun and relaxing rocket to ride. You just have to ignore all discussion focused on time frames of less than four years.
  - tapoxi 2y ago
    But you're not supposed to hold legal tender, by design you're supposed to spend it.
marinmania 2y ago
If the IMF was loaning them 1.4B to do economic development then its reasonable that the country not keep a massive liability on its balance sheets. Imagine I wanted to loan your car company 100M to build out a factory because I believe in the product. I'm told that your company keeps all its reserves in bitcoin and its possible that even if the factory is successful that the loan wont be repaid if bitcoin falls. I think if you are obsessed with bitcoin its easy to see this as conspiratorial, but the reality is no bank is going to loan a (company, person, country) money in cash if they are told the loan may default if bitcoin falls.
throwaway519 2y ago
They're actually paying to give it up then. That's a hard fail.
- liontwist 2y ago
  Did the value of their holdings drop over the past few years?
napierzaza 2y ago
[dead]
JumpCrisscross 2y ago
> this was clearly something else than a failure of the currency itself They needed the loan. The original thesis was taxes on crypto bros’ business and tourism would increase revenues while crypto-based lending would provide an alternative to the IMF. Neither panned out. This was a failure of Bitcoin to provide any of the international benefits of the dollar financial system.
npalli 2y ago
What do you mean "gave" them 1.4 Billion? It's a loan so it has to be repaid. Usually, this is unsaid but with crypto people you sometimes have to explain basic financial conditions. Also, the loan was to bail them from risks of Bitcoin.
- cmcaleer 2y ago
  Being granted a loan of $1.4B with favourable terms under the extended fund facility is an enormous privilege. El Salvador is certainly getting far more favourable terms than would for their USD-denominated bonds. Putting it another way, El Salvador being given a line of credit that would have cost them hundreds of millions of dollars had they sold bonds to raise this cash through traditional means. It's funny to have to explain basic government loan mechanics to this comment, given the derisive comment about "crypto people" needing basic financial concepts explained.
purist33 2y ago
There is a book called "Talking to your daughter about Economics", where the author explains one of the problems with bitcoin is, you cant print more of it in a crisis. Maybe thats what happened here.
- cle 2y ago
  Ironically part of the long-term problem was El Salvador's dollarization, also preventing them from printing in a crisis (that crisis being the COVID pandemic).
  - el-salvador 2y ago
    Dollarization was unpopular at first in El Salvador but after 24 years of dollarization, and both right and left wing governments, there are are no official plans of rolling it back. It's way too convenient to use the world's most used currency as our everyday currency.
- isubkhankulov 2y ago
  That may be one of the problems with bitcoin as legal tender and official state currency but not a problem with Bitcoin itself, quite the opposite: as evidenced by the genesis block’s embedded message: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”
culi 2y ago
The very first IMF loan ever given was to France for reconstruction. One of the terms for the condition was to remove the only elected communist in their government from their position. IMF loans have ALWAYS been political
- derektank 2y ago
  Arguably, both preconditions could have been simply intended to secure an eventual return on the loan. Having a communist in political leadership and allowing citizens to pay their taxes in Bitcoin both increase fiscal risk. I can understand the IMF wanting to reduce that risk as much as possible before providing a loan.
  - wordofx 2y ago
    ^ unsure why downvoting this as it’s 100% correct. IMF doesn’t hand out loans it doesn’t think will be paid back. (This is where China swoops in and gives a loan at lower interest rates with shadow contracts to get the resources or assets)
zombiwoof 2y ago
Facts help bolster an argument
fsckboy 2y ago
>a failure of the currency itself this is a really ambiguous phrasing. Is bitcoin a "currency"? is el Salvador adopting bitcoin as a ___?____ a currency?
- warkdarrior 2y ago
  El Salvador adopted Bitcoin as one of its national currencies.
  - fsckboy 2y ago
    like, "not your keys, not your bitcoin", if it's bitcoin, it's not your currency
tootie 2y ago
This wasn't a vendetta or a political maneuver. The IMF is intending to enforce stability on loan recipients but insisting on sensible policy. Per the article, the program was already unsuccessful and they wanted it removed as a risk factor.
patrickaljord 2y ago
> I dislike cryptocurrencies as much as the next guy Is this really the general sentiment on HN?
- wordofx 2y ago
  It should be. It’s dumb as hell. Bitcoin and blockchain have no real use.
  - int_19h 2y ago
    The real use is black market transactions. Whether you find that a feature or a bug depends a lot on where you live.
    - genem9 2y ago
      We have USD for that …
      - int_19h 2y ago
        Now try sending some to, say, Iran.
  - LoganDark 2y ago
    TBF Monero is pretty decent for buying drugs.
  - dcreater 2y ago
    I used to be close minded as well before actually studying Bitcoin. There are plenty of bad actors in crypto but Bitcoin is at worst a very interesting experiment that can profoundly change the world for the better. Most is not all of the rest of crypto is basically hawk tuah coin with less obvious illegitimacy. In fact bitcoiners don't consider Bitcoin as "crypto"
  - yard2010 2y ago
    That sounds equally wrong as "crypto is everything, blockchain is the solution" sentiment
aprilthird2021 2y ago
They gave it to them, with a contingency that they need to stop reckless financially dangerous policies, like allowing a wildly volatile cryptocurrency to be legal tender backed by the government at various levels of society. IMF loans often come with the stipulation that you need to reign in wild and speculative financial policies
enaaem 2y ago
Why do they need a loan if BTC makes them an economic powerhouse?
dragonwriter 2y ago
If you need to go to the IMF for a loan of ~3% of your GDP to mitigate the risks associated with Bitcoin, well, that's a pretty good sign that adopting Bitcoin as legal tender was a pretty disastrous failure.
- golergka 2y ago
  > to mitigate the risks associated with Bitcoin Was that the goal of the loan? How did you come to this conclusion?
  - dragonwriter 2y ago
    Its literally stated. in those words, in the upthread excerpt that describes them receiving the loan.
    - epigramx 2y ago
      [flagged]
      - asimpletune 2y ago
        [flagged]
        dang 2y ago
        Please don't respond to a bad comment by breaking the site guidelines yourself. That only makes things worse. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
        asimpletune 2y ago
        Sorry about that
      - dang 2y ago
        Can you please not post in the flamewar style here, regardless of how wrong another commenter is or you feel they are? https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
neilwilson 2y ago
No country with its own money ever needs to get the IMF involved. Largely because the only place the IMF can get your money is from you. Currencies are public monopolies. The problems always arise when a state starts issuing state backed liabilities in other denominations - as there is no way for a state to absolve itself of that debt without paying it back. It becomes a debtors prison.
- riffraff 2y ago
  Even if you have your own money you need stable foreign currency to operate. It's not like you just choose to issue debt in foreign denomination cause it's fun.
  - neilwilson 2y ago
    You don't. There is no requirement for the state to get involved in other people's money. That's for the private sector to sort out - largely because they can go bankrupt and wipe out the debt when things inevitably go wrong.
OhMeadhbh 2y ago
Or maybe the IMF doesn't want the money they "give" to El Salvador to be dissipated into a synthetic commodity masquerading as a deflationary currency. I'm not going to defend the IMF here... they're sort of like sharks swimming in the national currency markets (look up "Our Brand is Crisis" and "Life and Debt" for more info, and then read Summers' "The Payment System" for the IMF's take on things.) But... I think my point is... I don't think there's any more conspiracy going on here than normal IMF conspiracy. But the IMF is sort of open about it, so is it still a conspiracy? I don't think the IMF or WB care one whit about cryptocurrencies, they just don't even register. EDIT: Oh, and "Confessions of an Economic Hit-Man" is also nice and conspiratorial. If half of the author's assertions are truthful, there's WAY more happening in Latin America vis a vis international banking cabals.
taurknaut 2y ago
This seems to speak more to the general incompetency of the IMF than to any anti-crypto conspiracy
taurknaut 2y ago
1.35 billion dollars is an awfully small amount to purchase the promise of not developing a sovereign currency. By a couple orders of magnitude.
baq 2y ago
If your country depends on Michael Saylor not blowing up, it’s probably worth mitigating
ulfw 2y ago
Of course it was an utter failure. Why else would they need 1.4 B USD from the IMF when BTC has run up what... 6x or so since they started with this "experiment"?
nprateem 2y ago
They probably also have a condition not to spunk it on crypto. The bank would be pretty reckless not to stipulate these things.
topranks 2y ago
It failed independently of this, nobody over there was using it for transactions, many businesses already didn’t accept it.
deleted 2y ago
[deleted]
latexr 2y ago
> IMF gave them 1.4 billion to abandon the “experiment” No, that is not what the quote says. It says it was a condition on a loan. There is a huge difference between unsolicitedly saying “hey, I’ll give you money for you to stop betting on horses” or being asked for money and replying “OK, but if I do lend you the money you have to promise me you won’t spend it on horse betting; I want it back”.
NicoJuicy 2y ago
Did they use it daily? If the answer is no, then it's a failure of the currency itself.
travisgriggs 2y ago
I'm not seeing the obvious I guess. Care to share what the else was? And what the evidence is that the currency was "doing just fine" otherwise?
1vuio0pswjnm7 2y ago
"I dislike crypto as much as the next guy but this was clearly something else than a failure of the currency itself." Zeke Faux who wrote the book "Number Go Up", a George Plimpton-styled account which was released last year, went to El Salvador and tried to use crypto as currency. https://www.wwno.org/2023-09-19/tales-from-the-world-of-cryptocurrency-and-casino-capitalism https://www.wwno.org/2023-09-19/tales-from-the-world-of-cryp... BECKER: ... But also, I just want to point out that in 2021, the president of El Salvador, Nayib Bukele, announced that his government was going to be betting on Bitcoin. And we actually have a bit of tape from him at that year's Bitcoin conference with a lot of cheers from crypto enthusiasts about his government's use of Bitcoin. Let's listen. NAYIB BUKELE: Next week, I will send to Congress a bill that will make Bitcoin a legal tender in El Salvador. In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy. And in the medium and long term, we hope that this small decision can help us push forward (CHEERS). BECKER: And following that announcement, the government of El Salvador encouraged businesses to use Bitcoin. Zeke Faux, you traveled to El Salvador. What did you find out there? FAUX: ... And people were literally, I was at this conference. People were, it was one of the first ones I went to, people were in tears, and I just, I was like, what is this weird world, and they all said, you got to go to El Salvador, you got to see, it's the future, it's going to help the poor, they're all using Bitcoin. And the listeners are probably asking themselves, "What does this even mean, how does this make sense?" And it doesn't make sense. I got there, and one of the first places I went to was this little roadside store. And the president had passed this Bitcoin law, which meant that all businesses were supposed to accept Bitcoin as payment. The country's main currency is the dollar, and they didn't abandon that. But they're supposed to also use Bitcoin. And I went to the store, and I pulled, I grabbed, I asked for a bottle of water. And the clerk gave it to me, so I'm holding the water. And then in my terrible gringo Spanish, I said, "Puedo pagar con Bitcoin, por favor?" And the clerk just said, "Basura!" Trash! And grabbed the water out of my hand, and just walked away. Get out of here, you dumb tourist. I don't want to use your Bitcoin. And that was the attitude I got all over the place. Despite this huge push from the president, the currency was totally rejected by the people. Stores would only use it begrudgingly. And what using Bitcoin means is that they would have a special payment terminal and I could use an app on my phone to send my Bitcoins to them instead of using my credit card or my dollars, but the terminals never worked right. They're very slow on there and people complained. "Hey, the price of Bitcoin goes up and down a lot. Why would I want to accept that for my surf lesson or to sell you a beer? How about you just give me some dollars?" So the ones that did accept that it was just as like a courtesy for the annoying Bitcoin tourists, which I became one of."

kristjansson 2y ago

Conversely if that’s all it takes to induce them to give up it tells you something about the benefits they felt were accruing from BTC.

syndicatedjelly 2y ago
Is that really the message?
wongarsu 2y ago
Keep in mind that El Salvador is tiny. This is like 14 days of El Salvador's entire GDP. Or scaled to GDP, it's like giving a $1.2 Trillion loan to the USA.
hammock 2y ago
El Salvador has been in the IMF debt trap since 1949. It’s not just a billion dollar loan we’re talking about. Although scaled to GDP it’s quite a lot
olalonde 2y ago
They're not giving up on Bitcoin. In fact, it's likely that they'll use the loan to buy more Bitcoin. https://www.reuters.com/markets/currencies/el-salvadors-bitcoin-wallet-be-sold-or-discontinued-after-deal-with-imf-official-2024-12-19/ https://www.reuters.com/markets/currencies/el-salvadors-bitc...
- genem9 2y ago
  They already are. Just bought 20
- taurknaut 2y ago
  Who are they possible gonna offload that bitcoin on to? Their neighbor? That doesn't strike me as a socially acceptable thing to do.
  - olalonde 2y ago
    There's a deep and liquid market for Bitcoin - El Salvador isn't even a major holder in the grand scheme of things. I don't see what's socially unacceptable about selling Bitcoin to a willing buyer; it's simply a transaction between two parties, no different from trading foreign currency like USD. There's also no indication that they plan to spend or trade their Bitcoin anytime soon.
    - taurknaut 2y ago
      > i don't see what's socially unacceptable about selling Bitcoin to a willing buyer Well you're accepting payment for something people are expecting to hold value. Bitcoin only has value to a small subset of people with money. I'd definitely judge you for selling it if you have options for financial transactions via SWIFT.

awnird 2y ago

If bitcoin was such a success then why did they need an enormous loan?

ToValueFunfetti 2y ago
If the USD was such a good currency, why does the US operate at a deficit?
- JumpCrisscross 2y ago
  > If the USD was such a good currency, why does the US operate at a deficit? If the U.S. needed a bailout, the dollar would become a trash currency.
- Arainach 2y ago
  A deficit is not a loan. The USD and the historical strength and faith on the US allowed the US to offer its own securities, not ones pwned by and with terms dictated by external entities.
  - 2030ai 2y ago
    It smells, looks and quacks like a loan.
    - __MatrixMan__ 2y ago
      Smells more like a tokenomics scheme than a loan to me.
  - whimsicalism 2y ago
    the US borrows money. sure it can monetize its own debt at any time but that would have its own set of very high costs
- fsckboy 2y ago
  >why does the US operate at a deficit? are you talking about a trade deficit (the US operated at a trade deficit virtually the entire time it grew from 13 former colonies to the post WWII economic colossus. Lending money to a growing economy so it can turn around and purchase the equipment you are selling which it will use to be more productive is the secret sauce of a growing economy) or are you talking about a budget deficit? many countries around the world operate with budget deficits; "socialist" governments generally have higher deficits as they spend to maintain living standards whether the economy justifies it or not. The size of the deficit (they will grow all the time) does not matter, what matters is "as a %age of GDP". none of this, btw, has much to do with monetary policy, the maintenance of the currency. "strong" or "weak" currency really makes no difference. The strength/weakness of the currency how the books are balanced after the fact of what has happened in the actual economy. A country with a strong currency will find imports inexpensive, and will have trouble selling its goods, and citizens will be incented to buy imports. A country with a weak currency will have difficulty importing goods, but will have less trouble exporting. It's the currency that balances these books.

stephen_g 2y ago

Despite that interference, from everything I’ve read though it’s hard to describe the bitcoin experiment as anything else than a massive failure…

mlcrypto 2y ago
Massive success actually for anyone holding. Did you forget the price is $100k?
- aksss 2y ago
  What does that mean? USD value decreased that much and bitcoin proved itself as an asset with tangible value (like gold?), or did value of bitcoin itself rise? I’m not a currency guy, so I don’t pretend to know crap, it’s a real question, not rhetorical.
  - skulk 2y ago
    It means that if you bought under $100k, you are no longer the biggest fool. Bitcoin is completely unworkable as an everyday currency and this this is due to multiple factors. Any attempt to address these shortcomings ends up slowly[0] re-inventing the modern financial system and its various systems of trust. People who try to convince you otherwise are simply in search of a bigger fool, since they bring up the USD value of bitcoin. [0]: but also too quickly, hence all the breaches and 8-figure heists
  - mindcandy 2y ago
    Compared to the dollar over the past five years… The dollar down vs itself by 20ish percent. The median home price is up 30ish percent. Oil is up 45ish percent. Gold and the SP500 are each up 80ish percent. Bitcoin is up 1000ish percent. If you snooze through the day-by-day, season-by-season noise, the volatility of Bitcoin is a fun and relaxing rocket to ride. You just have to ignore all discussion focused on time frames of less than four years.
- tapoxi 2y ago
  But you're not supposed to hold legal tender, by design you're supposed to spend it.

marinmania 2y ago

If the IMF was loaning them 1.4B to do economic development then its reasonable that the country not keep a massive liability on its balance sheets. Imagine I wanted to loan your car company 100M to build out a factory because I believe in the product. I'm told that your company keeps all its reserves in bitcoin and its possible that even if the factory is successful that the loan wont be repaid if bitcoin falls. I think if you are obsessed with bitcoin its easy to see this as conspiratorial, but the reality is no bank is going to loan a (company, person, country) money in cash if they are told the loan may default if bitcoin falls.

throwaway519 2y ago

They're actually paying to give it up then. That's a hard fail.

liontwist 2y ago
Did the value of their holdings drop over the past few years?

napierzaza 2y ago

[dead]

JumpCrisscross 2y ago

> this was clearly something else than a failure of the currency itself They needed the loan. The original thesis was taxes on crypto bros’ business and tourism would increase revenues while crypto-based lending would provide an alternative to the IMF. Neither panned out. This was a failure of Bitcoin to provide any of the international benefits of the dollar financial system.

npalli 2y ago

What do you mean "gave" them 1.4 Billion? It's a loan so it has to be repaid. Usually, this is unsaid but with crypto people you sometimes have to explain basic financial conditions. Also, the loan was to bail them from risks of Bitcoin.

cmcaleer 2y ago
Being granted a loan of $1.4B with favourable terms under the extended fund facility is an enormous privilege. El Salvador is certainly getting far more favourable terms than would for their USD-denominated bonds. Putting it another way, El Salvador being given a line of credit that would have cost them hundreds of millions of dollars had they sold bonds to raise this cash through traditional means. It's funny to have to explain basic government loan mechanics to this comment, given the derisive comment about "crypto people" needing basic financial concepts explained.

purist33 2y ago

There is a book called "Talking to your daughter about Economics", where the author explains one of the problems with bitcoin is, you cant print more of it in a crisis. Maybe thats what happened here.

cle 2y ago
Ironically part of the long-term problem was El Salvador's dollarization, also preventing them from printing in a crisis (that crisis being the COVID pandemic).
- el-salvador 2y ago
  Dollarization was unpopular at first in El Salvador but after 24 years of dollarization, and both right and left wing governments, there are are no official plans of rolling it back. It's way too convenient to use the world's most used currency as our everyday currency.
isubkhankulov 2y ago
That may be one of the problems with bitcoin as legal tender and official state currency but not a problem with Bitcoin itself, quite the opposite: as evidenced by the genesis block’s embedded message: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”

culi 2y ago

The very first IMF loan ever given was to France for reconstruction. One of the terms for the condition was to remove the only elected communist in their government from their position. IMF loans have ALWAYS been political

derektank 2y ago
Arguably, both preconditions could have been simply intended to secure an eventual return on the loan. Having a communist in political leadership and allowing citizens to pay their taxes in Bitcoin both increase fiscal risk. I can understand the IMF wanting to reduce that risk as much as possible before providing a loan.
- wordofx 2y ago
  ^ unsure why downvoting this as it’s 100% correct. IMF doesn’t hand out loans it doesn’t think will be paid back. (This is where China swoops in and gives a loan at lower interest rates with shadow contracts to get the resources or assets)

zombiwoof 2y ago

Facts help bolster an argument

fsckboy 2y ago

>a failure of the currency itself this is a really ambiguous phrasing. Is bitcoin a "currency"? is el Salvador adopting bitcoin as a ___?____ a currency?

warkdarrior 2y ago
El Salvador adopted Bitcoin as one of its national currencies.
- fsckboy 2y ago
  like, "not your keys, not your bitcoin", if it's bitcoin, it's not your currency

tootie 2y ago

This wasn't a vendetta or a political maneuver. The IMF is intending to enforce stability on loan recipients but insisting on sensible policy. Per the article, the program was already unsuccessful and they wanted it removed as a risk factor.

patrickaljord 2y ago

> I dislike cryptocurrencies as much as the next guy Is this really the general sentiment on HN?

wordofx 2y ago
It should be. It’s dumb as hell. Bitcoin and blockchain have no real use.
- int_19h 2y ago
  The real use is black market transactions. Whether you find that a feature or a bug depends a lot on where you live.
  - genem9 2y ago
    We have USD for that …
    - int_19h 2y ago
      Now try sending some to, say, Iran.
- LoganDark 2y ago
  TBF Monero is pretty decent for buying drugs.
- dcreater 2y ago
  I used to be close minded as well before actually studying Bitcoin. There are plenty of bad actors in crypto but Bitcoin is at worst a very interesting experiment that can profoundly change the world for the better. Most is not all of the rest of crypto is basically hawk tuah coin with less obvious illegitimacy. In fact bitcoiners don't consider Bitcoin as "crypto"
- yard2010 2y ago
  That sounds equally wrong as "crypto is everything, blockchain is the solution" sentiment

aprilthird2021 2y ago

They gave it to them, with a contingency that they need to stop reckless financially dangerous policies, like allowing a wildly volatile cryptocurrency to be legal tender backed by the government at various levels of society. IMF loans often come with the stipulation that you need to reign in wild and speculative financial policies

enaaem 2y ago

Why do they need a loan if BTC makes them an economic powerhouse?

dragonwriter 2y ago

If you need to go to the IMF for a loan of ~3% of your GDP to mitigate the risks associated with Bitcoin, well, that's a pretty good sign that adopting Bitcoin as legal tender was a pretty disastrous failure.

golergka 2y ago
> to mitigate the risks associated with Bitcoin Was that the goal of the loan? How did you come to this conclusion?
- dragonwriter 2y ago
  Its literally stated. in those words, in the upthread excerpt that describes them receiving the loan.
  - epigramx 2y ago
    [flagged]
    - asimpletune 2y ago
      [flagged]
      - dang 2y ago
        Please don't respond to a bad comment by breaking the site guidelines yourself. That only makes things worse. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
        asimpletune 2y ago
        Sorry about that
    - dang 2y ago
      Can you please not post in the flamewar style here, regardless of how wrong another commenter is or you feel they are? https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

neilwilson 2y ago

No country with its own money ever needs to get the IMF involved. Largely because the only place the IMF can get your money is from you. Currencies are public monopolies. The problems always arise when a state starts issuing state backed liabilities in other denominations - as there is no way for a state to absolve itself of that debt without paying it back. It becomes a debtors prison.

riffraff 2y ago
Even if you have your own money you need stable foreign currency to operate. It's not like you just choose to issue debt in foreign denomination cause it's fun.
- neilwilson 2y ago
  You don't. There is no requirement for the state to get involved in other people's money. That's for the private sector to sort out - largely because they can go bankrupt and wipe out the debt when things inevitably go wrong.

OhMeadhbh 2y ago

Or maybe the IMF doesn't want the money they "give" to El Salvador to be dissipated into a synthetic commodity masquerading as a deflationary currency. I'm not going to defend the IMF here... they're sort of like sharks swimming in the national currency markets (look up "Our Brand is Crisis" and "Life and Debt" for more info, and then read Summers' "The Payment System" for the IMF's take on things.) But... I think my point is... I don't think there's any more conspiracy going on here than normal IMF conspiracy. But the IMF is sort of open about it, so is it still a conspiracy? I don't think the IMF or WB care one whit about cryptocurrencies, they just don't even register. EDIT: Oh, and "Confessions of an Economic Hit-Man" is also nice and conspiratorial. If half of the author's assertions are truthful, there's WAY more happening in Latin America vis a vis international banking cabals.

taurknaut 2y ago

This seems to speak more to the general incompetency of the IMF than to any anti-crypto conspiracy

taurknaut 2y ago

1.35 billion dollars is an awfully small amount to purchase the promise of not developing a sovereign currency. By a couple orders of magnitude.

baq 2y ago

If your country depends on Michael Saylor not blowing up, it’s probably worth mitigating

ulfw 2y ago

Of course it was an utter failure. Why else would they need 1.4 B USD from the IMF when BTC has run up what... 6x or so since they started with this "experiment"?

nprateem 2y ago

They probably also have a condition not to spunk it on crypto. The bank would be pretty reckless not to stipulate these things.

topranks 2y ago

It failed independently of this, nobody over there was using it for transactions, many businesses already didn’t accept it.

deleted 2y ago

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latexr 2y ago

> IMF gave them 1.4 billion to abandon the “experiment” No, that is not what the quote says. It says it was a condition on a loan. There is a huge difference between unsolicitedly saying “hey, I’ll give you money for you to stop betting on horses” or being asked for money and replying “OK, but if I do lend you the money you have to promise me you won’t spend it on horse betting; I want it back”.

NicoJuicy 2y ago

Did they use it daily? If the answer is no, then it's a failure of the currency itself.

travisgriggs 2y ago

I'm not seeing the obvious I guess. Care to share what the else was? And what the evidence is that the currency was "doing just fine" otherwise?

1vuio0pswjnm7 2y ago

"I dislike crypto as much as the next guy but this was clearly something else than a failure of the currency itself." Zeke Faux who wrote the book "Number Go Up", a George Plimpton-styled account which was released last year, went to El Salvador and tried to use crypto as currency. https://www.wwno.org/2023-09-19/tales-from-the-world-of-cryptocurrency-and-casino-capitalism https://www.wwno.org/2023-09-19/tales-from-the-world-of-cryp... BECKER: ... But also, I just want to point out that in 2021, the president of El Salvador, Nayib Bukele, announced that his government was going to be betting on Bitcoin. And we actually have a bit of tape from him at that year's Bitcoin conference with a lot of cheers from crypto enthusiasts about his government's use of Bitcoin. Let's listen. NAYIB BUKELE: Next week, I will send to Congress a bill that will make Bitcoin a legal tender in El Salvador. In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy. And in the medium and long term, we hope that this small decision can help us push forward (CHEERS). BECKER: And following that announcement, the government of El Salvador encouraged businesses to use Bitcoin. Zeke Faux, you traveled to El Salvador. What did you find out there? FAUX: ... And people were literally, I was at this conference. People were, it was one of the first ones I went to, people were in tears, and I just, I was like, what is this weird world, and they all said, you got to go to El Salvador, you got to see, it's the future, it's going to help the poor, they're all using Bitcoin. And the listeners are probably asking themselves, "What does this even mean, how does this make sense?" And it doesn't make sense. I got there, and one of the first places I went to was this little roadside store. And the president had passed this Bitcoin law, which meant that all businesses were supposed to accept Bitcoin as payment. The country's main currency is the dollar, and they didn't abandon that. But they're supposed to also use Bitcoin. And I went to the store, and I pulled, I grabbed, I asked for a bottle of water. And the clerk gave it to me, so I'm holding the water. And then in my terrible gringo Spanish, I said, "Puedo pagar con Bitcoin, por favor?" And the clerk just said, "Basura!" Trash! And grabbed the water out of my hand, and just walked away. Get out of here, you dumb tourist. I don't want to use your Bitcoin. And that was the attitude I got all over the place. Despite this huge push from the president, the currency was totally rejected by the people. Stores would only use it begrudgingly. And what using Bitcoin means is that they would have a special payment terminal and I could use an app on my phone to send my Bitcoins to them instead of using my credit card or my dollars, but the terminals never worked right. They're very slow on there and people complained. "Hey, the price of Bitcoin goes up and down a lot. Why would I want to accept that for my surf lesson or to sell you a beer? How about you just give me some dollars?" So the ones that did accept that it was just as like a courtesy for the annoying Bitcoin tourists, which I became one of."