Investigation opens the use of Bitcoin funds in El Salvador

The investigation could become a thorny issue in El Salvador as many describe the commitment to the digital asset as a complete failure after it became legal tender and did not deliver the profits promised by the presidential house.

CABEI’s $600 million loan was intended to support SMEs affected during the pandemic, of which only $20 million reached its destination.

CABEI President Dante Mossi announced the loan in April 2021 with the message that the approved funds would benefit four million people, including Salvadoran entrepreneurs and families.

OCCRP said in its investigation that budget documents show that the government diverted most of the money to finance its own needs. It allocated $425 million to the state’s general obligations, and of this amount, more than $200 million was allocated to making Bitcoin a national currency.

The funds were used to build the necessary financial structure, as well as giving $30 to those who downloaded the Chivo app. However, Mossi told OCCRP that CABEI had specifically prohibited the $600 million loan contract from being used for Bitcoin.

The investigation showed that the bank’s adoption of new practices since Musi became president in late 2018 has made it difficult to track how governments use its funds.

The investigation indicated that the bank financed projects that were converted into corrupt practices or were used to finance projects favored by some governments.

Today, experts and followers of the issue certainly do not know how much Bitcoin El Salvador owns, although some estimate the amount as of September 2023 at $76.5 million.

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This is seen as a minor if you consider the fact that in 2021, Elon Musk, one of the richest men in the world, still owns around $1.26 billion worth of Bitcoin from his initial investment.

Whatever the value of what El Salvador invested in this cryptocurrency, what is striking is that the government used part of the loan for other purposes to implement a project that has not yet borne fruit, while criticism is increasing, and may increase in the future. The coming weeks.

Jha/lb

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