El Salvador’s President Nayib Bukele took to Twitter to proclaim the Bitcoin protocol as the other of FTX and likened FTX to a Ponzi scheme within the wake of the alternate’s collapse on Nov. 14.
Bukele, a staunch promoter and believer of Bitcoin, mentioned the flagship crypto was designed to forestall Ponzi schemes, financial institution runs, and fraud dedicated by establishments within the monetary system.
Examples cited by the President embody Enron’s abuse of accounting practices to inflate the corporate’s revenues and conceal debt in its subsidiaries in 2021, American fraudster Bernie Madoff’s $64.8 billion Ponzi scheme in 2019, and most lately, Sam Bankman-Fried (SBF) secretly transferring clients’ funds to Alameda Analysis.
The Bitcoin blockchain is an open-source protocol, upon which any transaction could be verified by the general public, versus a Ponzi scheme, the place funding funds are shrouded in secrecy.
Bitcoin and Bukele
Faux information claiming Bukele saved the nation’s crypto holdings on collapsed FTX ran rampant final week however have been rapidly dismissed by Binance CEO Changpeng ‘CZ’ Zhao through a tweet on Nov. 11.
Nevertheless, the quantity Bukele and his authorities spent on Bitcoin shopping for sprees utilizing public cash since he made the foreign money authorized tender within the nation was by no means disclosed.
On Oct. 31, 2022, The Improvement financial institution of El Salvador, BANDESAL, refused the nation’s Anti-Corruption Authorized Advisory Heart’s (ALAC) request to reveal the federal government’s Bitcoin buy and sale data for the second time.
The nation at the moment holds 2,381 Bitcoin, roughly $39.8 million on the time of writing, in accordance with knowledge from Bloomberg Economics.
In the meantime, the federal government can be ranked by Bloomberg Economics as one of many prime rising market international locations which might be weak to a debt default.
The adoption of Bitcoin within the nation has been gradual thus far.
In response to a March 2022 survey by the Chamber of Commerce and Business of El Salvador, 86% of companies by no means made a sale with Bitcoin, whereas solely 20% of companies settle for Bitcoin whereas solely 14% of respondents have used Bitcoin transactions because it grew to become authorized tender in El Salvador.