El Salvador Sticks It to the IMF

Plus: Bitcoin City, and concerns about USDT and USDC.

Insights, news and analysis for the professional investor By Lawrence Lewitinn, Managing Editor for Global Capital Markets November 28, 2021 Sponsored by     Bitcoin (BTC) - $54,447.88 Ether (ETH) - $4,061.98 Prices as of 11/28/21 @ 8:00 a.m. UTC If you were forwarded this newsletter and would like to receive it, sign up here.  It's Thanksgiving weekend in the United States, so many CoinDesk readers are at home, taking it easy. But their portfolios aren't, because crypto trades 24/7/365.24.   One country where crypto – particularly bitcoin – has been busy is, of course, El Salvador.   More on that below in this week's Briefing. Happy Thanksgiving!   – Lawrence Lewitinn A message from Crypto.com Buy bitcoin and 100+ cryptocurrencies with 20+ fiat currencies. New users can enjoy 0% credit/debit card fees on all crypto purchases made in their first 30 days. Download the Crypto.com App now. The Briefing Last week, President Nayib Bukele of El Salvador greeted enthusiasts in a fireworks-laden spectacular entrance at the Latin American Bitcoin and Blockchain Conference wearing what passes for formalwear for tech bros, namely a backwards baseball cap and white-collared shirt with matching pants. He announced the creation of something to be called Bitcoin City, near the Conchagua volcano not far from the Gulf of Fonseca. Geothermal heat will help generate enough power to mine the cryptocurrency.   The project will be financed using a $1 billion bond offering developed by Blockstream and listed on the exchange Bitfinex. Half of the proceeds will be used to buy bitcoin and the bonds have a coupon of 6.5%, roughly half the yield the market currently prices for the country's bond. Blockstream's Samson Mow sees annualized yields of 146% by year 10 – assuming bitcoin hits $1 million in five years because … YOLO!   Not everyone is thrilled with these bonds, believe it or not. The International Monetary Fund (IMF), which is normally on the receiving end of criticisms, has been frowning on El Salvador's bitcoin foray for months, so it was no great surprised it wasn't cheering when Pres. Bukele made his announcement on the 20th. And that may be no small part as to why El Salvador is now doing this.   "I know the concerns here in [Washington,] D.C. are about losing the power of the dollar and we can understand that, but El Salvador has to move on [because] it wants to be on a different level," said El Salvador's ambassador to the United States, Milena Mayorga. (The IMF is headquartered in the U.S. capital.)   The diplomat also took a shot at the White House, saying, "President Bukele right now has 95% of national approval. And if you see President Biden, he doesn't have one year in government and he has very low approval."   Ouch!   Speaking of smarting, something rather curious happened in India. The price of USDT temporarily dipped to 60 INR at a time with the U.S. dollar was trading at 74.37 INR on Bitfinex's WazirX, the country's largest crypto exchange. The catalyst was that the lower house in India's parliament, the Lok Sabha, posted a bill that would pretty much ban all private cryptocurrencies to be brought up during the winter session set to start on Monday. The dollar-based stablecoin eventually returned to within range of its peg.   Yet, there are those who have other concerns about the world's largest stablecoin by market cap. Over at The Defiant, Brady Dale, a CoinDesk alumnus who is one of the best DeFi journalists out there, has a fantastic piece about concerns regarding the likes of USDT and USDC.   It's always hard to make a buck – or even a thing that's supposed to represent a buck on the blockchain.   – L.L.   A message from Copper Copper provides a gateway into the cryptoasset space for institutional investors by offering custody, prime brokerage, and settlements across 250 digital assets and more than 40 exchanges. We are committed to providing flexible solutions that adapt to the changing cryptoasset space, while enabling far greater transparency, control, and security for asset managers.    To learn more visit copper.co/interest Chain Links Pantera Capital raised $600 million for its fourth crypto-focused fund. TAKEAWAY: Pantera remains one of the largest crypto investment funds in terms of assets under management, with its fund one tier below Paradigm Capital's recent $2.5 billion venture fund. Institutional investors made up 75% of the fund. Past funds were predominantly supported by high-net-worth individuals.    The Indian government will submit a bill that would effectively ban most cryptocurrencies. TAKEAWAY: When the draft had originally surfaced in January, many were confident that the country would take a friendlier stance toward the technology. It is possible that India could ban private cryptocurrency in a plan to release a central bank digital digital currency.   Citi looks to expand its digital asset division by hiring 100 staffers with a blockchain focus. TAKEAWAY: The banking giant had previously hired senior leaders to cover the industry, without disclosing plans for future services. With the total value of crypto sitting around a $3 trillion market capitalization, it becomes harder for financial institutions to ignore.   El Salvador looks to offer bitcoin-backed bonds to buy the digital currency and fund the building of "Bitcoin City." TAKEAWAY: The country looks to raise $1 billion with the offering. The 10-year bonds pay a 6.50% coupon, which is a rate that signals that the bond is less risky than the country's outstanding bonds, which pay around 13%.   – Teddy Oosterbaan Consensus 2022, the must-attend crypto and blockchain experience of the year, is heading to Austin, Texas, from June 9-12, 2022. This is the only festival showcasing and celebrating all sides of the blockchain and crypto ecosystems, and their wide-reaching effect on commerce, culture and communities. Register now for the lowest price. Podcast episodes worth listening to: The Breakdown, With NLW "What Billions of Dollars in Crypto Fundraising Says About the Bull Market" If the good times are over, many have the dry powder to weather the storm.   On Purpose, With Tyrone Ross "Bitcoin, the Evolving Organism" Empowering people everyday and creating new modes of thinking through education.   Odd Lots (Bloomberg) "Jason Furman on Red-Hot Inflation and What to Do About It" The former chairman of the CEA says it's time to ease off the gas pedal.   UnChained (Laura Shin) "Why 'EIP 1559 Is Like Catnip for Investors'" Two tokenomics experts, Yan Liberman, co-founder of Delphi Digital, and Viktor Bunin, protocol specialist at Coinbase Cloud, discuss their experiences building tokens, their thoughts on the recent ENS/PSP airdrops and what "fair" token distribution looks like.   The Scoop (TheBlock) "'Mania is just absolutely peaking right now': TradingView's Pierce Crosby" Crosby joined host Frank Chaparro to discuss the state of the retail market in crypto and stocks, the data firm's institutional ambitions and its bid to take trading charts global. Crypto Long & Short A newsletter from CoinDesk See Previous Editions Were you forwarded this newsletter? Sign up here.  Copyright © 2021 CoinDesk, All rights reserved.  250 Park Avenue South New York, NY 10003, USA Manage your newsletter subscriptions  |  Unsubscribe from all CoinDesk email