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El Salvador Passes Change to Bitcoin Law, Sparking Bond Gain

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(Bloomberg) – The dollar bonds in El Salvador in emerging markets increased on Thursday after legislators agreed to changes to the Bitcoin law in the country, which was necessary to secure an international cash fund loan.

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Government debt through the curve gained, with notes due in 2054, rising 2.7 cents in dollars to 107 cents, according to the counseling pricing data that Bloomberg collected. The jumping indicated that the investor optimism is that the Central State of America is about to enter a $ 1.4 billion deal with the International Monetary Fund.

“This was the law they need to pass” to obtain multilateral financing. “We expect to see the approval of the International Monetary Fund in the coming weeks.”

The changes agreed upon by Congress makes companies accept bitcoin as a form of payment. It also requires the government to pay its local and foreign obligations to the currency issued, according to a report issued by the La Prensa Grafica newspaper.

The country owns 6,049 Bitcoin in its reserves, at a value of about $ 636 million, and adds during the past seven days, according to a government outcome.

The US ambassador to the United States, Melina Mayerga, said that the nation is still committed to making daily bitcoin purchases and will maintain the “ecosystem” that supports digital assets, despite the new legislation.

It surpasses performance

The dollar debt in El Salvador has delivered a 30 % profit for the past 12 months, about three times the average return through the emerging sovereign bond index.

In 2021, El Salvador became the first country to adopt the cryptocurrency as a legal tender – along with the dollar – the president gave Nayeb’s reputation to the Polic immediately as a pioneer in the bitcoin and put his country against the International Monetary Fund, which objected to the idea.

After years of negotiation, Bukele fell and agreed to changes in the law to comply with the right of international monetary. This helped to pay prices in bonds, some of which are now trading over Par.

” While bonds can continue to perform if the country provides more economic reforms, “the International Monetary Fund deal is fully estimated here.”

-With help from Jim Wens.

(Updating prices in the second paragraph, adds a context that begins in the fifth.)

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