Wednesday, January 26, 2022

IMF pushes ES to back off Bitcoin (Jan. 26, 2022)

The International Monetary Fund is pushing El Salvador to backtrack on a reform that made Bitcoin legal tender last year. In a new report IMF directors "stressed that there are large risks associated with the use of bitcoin on financial stability, financial integrity, and consumer protection, as well as the associated fiscal contingent liabilities." Some IMF directors have also expressed concern over the risks associated with issuing bitcoin-backed bonds, referring to the president’s plan to issue a $1 billion, 10-year "Bitcoin Bond" this year. (CNBC)

Since El Salvador adopted Bitcoin as legal money three months ago, the crypto currency's plunging value has cost the national treasury up to $22 million worth of reserves, according to the vice president of Moody’s credit rating agency. Concerns over financial transparency linked to the country's adoption of bitcoin as legal tender have stalled a loan deal with the IMF. (Washington Post WorldViews)

The new report comes as El Salvador's President Nayib Bukele, a well-known crypto enthusiast, maintains his "buying the dip" philosophy with public funds. On Friday he purchased 410 bitcoin worth $15 million as the cryptocurrency's price plunged on Friday, according to Bukele. After its purchase on Friday, El Salvador held more than 1,500 bitcoins, according to CoinDesk. The president is a well-known crypto enthusiast and is known for "buying the dip." (Business Insider)

Bitcoin was touted as a way of helping facilitate remittances from abroad, a key source of funding for many citizens. But it has turned out to be a costly transaction, explains the Washington Post. In total, fees on both sides of the transaction can run between 7 percent and 9.5 percent, potentially higher.

News Briefs

  • Cuban authorities acknowledged for the first time yesterday that they are prosecuting more than 700 people who protested against the government last July, including 55 between ages 16 and 18. Authorities also disclosed that 25 minors under 16 faced penalties like internment in centers handled by the Ministry of Interior, and that 28 detainees between 16 and 18 are currently in jail, reports the Miami Herald.

  • Human rights groups, the U.S. government and the European Union have criticized the mass trials of the protesters, saying they lack transparency and that long jail sentences were disproportionate with the crimes committed, reports Reuters. Rights groups observing the process and advising those accused say prison penalties for dozens already sentenced, including for sedition, have ranged from four to 30 years. (See Jan. 17's post.)

  • Last year, Human Rights Watch accused the Cuban government of “systematically” abusing detained protesters, including children under the age of 18, notes Al Jazeera.

  • Cuban activist Berta Soler, who leads the Ladies in White protest movement, was arrested ahead of a regular demonstration in support of political prisoners, on Sunday, along with three other women. (AFP)
Regional Relations
  • Russia’s President Vladimir Putin discussed the “strategic partnership” and further coordination of “actions in the international arena” with Cuban leader Miguel Díaz-Canel in a call disclosed Monday by the Kremlin. The call followed Russian threats of a potential military deployment to Cuba earlier this month. (Miami Herald, see Jan. 17's post.)
  • Member countries repeatedly raised concerns about claims of torture, arbitrary arrests and extrajudicial killings taking place in Venezuela at yesterday's U.N. human rights session. Venezuelan Vice President Delcy Rodríguez tried to deflect blame onto U.S. sanctions, which she said accentuated Venezuelans' suffering, and said the country has made progress in protecting the rights and freedoms of its population. (Miami Herald)

  • Ahead of this year’s periodic human rights review, Human Rights Watch has submitted a summary of human rights conditions in Venezuela with recommendations to restore the rule of law and implement reforms to protect rights. 

  • Venezuela's National Electoral Council (CNE) announced last week that, after accepting three requests, it had approved a timeline for a presidential Recall Referendum. But the timeframe established by the electoral authority makes it impossible to exercise this constitutional right, reaffirming the weakness of democratic institutions in the country, according to a group of Venezuelan social and human rights organizations. (Venezuelan Politics and Human Rights)
  • Xiomara Castro will assume Honduras' presidency tomorrow. Outgoing President Juan Orlando Hernández is widely expected to be indicted by U.S. prosecutors on drug trafficking conspiracy charges upon leaving office, reports the Guardian.
  • Brazilian President Jair Bolsonaro's far-right ideological mentor Olavo de Carvalho died at the age of 74 this week. A prominent coronavirus denier -- he went so far as to call it the “moronavirus” --, it was prominently reported that Carvalho died of Covid-19. Bolsonaro lamented the loss of “one of the greatest thinkers in our country’s history” and declared a national day of mourning, reports the Guardian. He was a deeply divisive figure, exalted by a segment of the right that viewed him as a clear-eyed philosopher, and despised by much of the left and the intellectual elite, reports the Associated Press.
  • The U.S. Coast Guard was searching yesterday for 39 people missing after their boat reportedly capsized over the weekend off Florida in a suspected human-smuggling venture departed from the Bahamas. (Washington Post)
Did I miss something, get something wrong, or do you have a different take? Let me know ... 


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