New crypto regulation, volcano bonds, and sovereign non-default
the government of el salvador is already defaulting. local law calls for a redistribution of the national GDP to the 262 municipal governments throughout the country to finance local development projects. the central government stopped disbursing those funds two years ago. the other anticipated financial crunch is the imminent pension fund system reform. the government is telling the people there will be an increase in retirement payouts but the data shows there just isn't enough funds to even sustain the system much longer. the strategy is aimed at holding down public finances in check until reelection is achieved, so their efforts are only considered in the short to mid terms. in the long term, however, there is extreme uncertainty. and this is where we can make a connection to the volcano bond fiasco and the bitcoin failed experiment. there just isn't enough credibility, real economic output and financial muscle to make any realistic attempt to promote such ridiculous ideas, never mind the crisis crypto is facing on its own in the first place.
Great article! Just not sure I get "The volcano bond bundled a 10-year local El Salvador law sovereign bond and a call option on bitcoin from the ‘bitcoin dividend’. "