El Salvador Bank Accepts Collateral of 200 Bitcoin ATMs

El Salvador is a country that has taken the attention of the crypto community. Its president has made bold moves regarding cryptocurrency to the point that giant financial institutions around the world are questioning his judgment. The country takes the stage once as it makes moves that some would call foolish. 

El Salvador Bank Will Accept 200 Bitcoin ATMs

A state-owned bank in El Salvador has made some interesting claims. The bank gave a crypto firm a loan of 1.5 million US dollars and what’s even more interesting is that the bank is willing to accept 200 Bitcoin ATMs as collateral for the loan. 

This surprising news was documented by ElSalvador.com and they stated that they even have access to the documents. They state that Banco Hipotecario de El Salvador or the Mortgage Bank of El Salvador recently signed off a loan. The warranty of the loan is stated to be 36 months with each Bitcoin ATM priced nearly at $7,760.

This report from ElSalvador.com comes with convincing proof including photographs of the document as well as the name of the firm itself which is Athena Holdings El Salvador. Furthermore, the report states that Athena Holding is a newly established firm made in November 2020 which was just seven months before Bitcoin was made legal tender by the Legislative Assembly. 

At the time of the company’s founding, its partners included Salvadorans like Carlos Miguel Rivas Carrillo and Jorge Alejandro Rivas Bernal who founded the company with just a capital of $2000 US dollars. 

Going back to the loan, the report indicates that Athena Bitcoin has already made moves to roll out a large number of Bitcoin ATMs in the country. Eric Gravengaard, the currency head of Athena Bitcoin was secured as a co-signer of the loan.  

Media outlets that opposed President Nayib Bukele’s policies regarding bitcoin have a lot to say regarding the matter. They say that Athena Bitcoin is not legally registered in the country of El Salvador and that it has foreign legal statutes. Because of this status, Athena Bitcoin’s ability to fulfill the loan as its creditor might be compromised.

Previously, Athena Bitcoin was responsible for providing tech support for the Chivo Bitcoin app however this responsibility has been transferred to a different firm. Another notable mention is that the Salvadoran government had previously announced that it will be rebooting the Chivo Bitcoin app thanks to multiple reports of fraud and errors in its system. Furthermore, Athena Bitcoin announced in the previous year that it was planning to install 1,500 Bitcoin ATMs in the country when it was still supporting the Chivo App.

Julio César Herrera, Banco Hipotecario’s Identity and Sustainability Manager stated that they can’t reveal any data on their clients. However, Herrera explained that the bank has policies and procedures that assess the risks of the loan defending the legitimacy of the bank’s customers.

El Salvador.com has quoted multiple banking experts regarding the matter and they’ve told the news agency that ATMs are depreciable assets making them a bad deal when it comes as collateral for a loan. These experts even remarked that the bank has made a “bad deal” accepting ATMs as collateral in the first place. 

Conclusion

El Salvador is an interesting topic for the crypto community considering that they’ve made a lot of questionable moves regarding cryptocurrency adoption. Now whether or not the country will flourish thanks to these policies remains to be seen. However, this particular news sounds extremely off-putting considering a large bank is accepting depreciable assets like ATMS as collateral.

* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.