President Nayib Bukele announced on March 15th that El Salvador will “continue” purchasing one Bitcoin per day, adding to the country’s digital asset holdings. According to Bukele, these newly acquired Bitcoins will be stored in a “cold wallet” dedicated to the government’s Bitcoin investments.

Blockchain data shows that around 80% of the Bitcoins received by this wallet between March 12th and 14th originated from the cryptocurrency exchange Bitfinex. This company has wielded significant influence over cryptocurrency policies in El Salvador.

If Bukele’s claims are accurate, El Salvador has acquired 488 Bitcoin through these daily purchases since November 16th, 2022, when the initiative was first announced.

However, there is a lack of official documentation detailing the government’s Bitcoin acquisitions and investments. No contracts or records have been publicly released proving any formal agreement between El Salvador and Bitfinex for cryptocurrency trading.

This opaque approach has led to widespread skepticism about the true status of the country’s Bitcoin holdings. Economists question whether the purchased Bitcoins are actually recorded as state assets, and if so, under which government entity they are held.

According to economist Tatiana Marroquín on ElSalvador.com, “In the General Budget of the Nation there is no budget unit assigned to Bitcoin. I do not want to say that the purchases are illegal, but I do mean that they are not included in this instrument of both planning and control. These purchases go against the rules of administration of public funds.”

“Those Bitcoin should be listed in the government’s assets section of its financial balance sheet,” stated Aaron Sepúlveda-Cué, an economist from Georgia Southern University. “But Bukele’s government does not like to reveal information about anything.”

The administration’s reluctance to disclose details about its Bitcoin program has fueled speculation that the Salvadoran state may not actually own the digital assets it claims to possess.

Bukele, “the world’s coolest dictator”

Apart from being a Bitcoin bull, the El Salvadorian leader is a self-described dictator. He has called himself “the world’s coolest dictator.” 

One of the landmarks of his leadership is the aggressive gang crackdown that has dramatically brought down the country’s murder rate. But El Salvadorians have paid for this with their civil liberties, the country has been in an extended state of emergency since March 27, 2022.

In February, Bukele secured re-election after the country’s Supreme Electoral Tribunal allowed him to run for a second term even if this is prohibited under El Salvador’s constitution.

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