El Salvador's Vice President Felix Ulloa has mounted a robust defense of the nation's ongoing bitcoin buying program during a market slump, asserting that the cryptocurrency is a strategic reserve asset rather than a speculative tool. He argued the country is preparing for a world where fiat currencies will eventually disappear.
Speaking to critics of the 'one bitcoin a day' purchase schedule proposed by President Nayib Bukele, Ulloa stated: "Bitcoin is not a stock; it's not traded on the stock market, its value doesn't fluctuate, and it's not for speculation. We understand bitcoin as a strategic state reserve." He emphasized that because El Salvador does not intend to sell its BTC holdings, it has neither incurred losses nor accrued gains in fiat terms. Ulloa argued that nations holding more cryptocurrency will have an advantage in a future digital economy, as traditional currencies face obsolescence.
IMF Agreement Does Not Halt Bitcoin Buys
Despite agreeing to downgrade bitcoin's legal tender status and limit public-sector crypto activities as part of a credit arrangement with the International Monetary Fund (IMF), El Salvador continues to add to its reserves. According to the National Bitcoin Office (ONBTC), the country now holds 7,568.37 bitcoin, valued at over $507 million at the time of writing.
Ulloa added: "When people understand that, and the world understands that we are no longer dealing with paperwork and the dollar, the pound, and the euro, but that there will be this financial freedom in the world, in the international market, they will understand." This statement underscores the government's long-term vision for bitcoin as a hedge against fiat currency depreciation.
Strategic Vision Beyond Short-Term Volatility
The 'one bitcoin a day' strategy, championed by President Bukele, has drawn criticism amid a declining market. However, Ulloa dismissed these concerns as short-term noise, stressing that El Salvador is planning for a multi-decade horizon. He believes bitcoin's ultimate value will be determined by global adoption rates, not temporary price swings.
El Salvador's approach mirrors a growing trend among nations exploring bitcoin as a strategic reserve asset. Meanwhile, the IMF has formally approved a $1.4 billion credit facility for the country, aimed at boosting its finances, though the deal imposes some constraints on bitcoin-related policies without completely banning purchases.