El Salvador Has Postponed The Issuance Of Bitcoin Bonds Until September
Aside from postponing the issuing of Bitcoin bonds, El Salvador government appears to have reduced the rate at which new Bitcoin is purchased.
Due to poor market conditions exacerbated by the geopolitical crisis, El Salvador’s government has chosen to postpone the issuance of a Bitcoin (BTC)-backed bond.
El Salvador’s “Volcano Bond” will not go live in March, as the Salvadoran government had hoped, according to finance minister Alejandro Zelaya, who spoke to a local television station.
The delay, according to Zelaya, was caused by the unpredictable price of Bitcoin, which was fueled by the Russia-Ukraine issue. He went on to say that the government of El Salvador had decided to wait for favorable financial market circumstances, estimating September at the earliest, and that:
“Now is not the time to issue the bond […] In May or June the market variants are a little different. At the latest in September. After September, if you go out to the international market, it is difficult to raise capital.”
Bitcoin is currently trading at $42,236, up roughly 10% in the last 30 days. Since the Salvadoran government first revealed plans for Bitcoin bonds in November, the cryptocurrency has lost over half of its value.
Zelaya hinted at a possible delay of El Salvador’s Bitcoin bond, citing the world’s fragile political climate as one of the main reasons for the delay
The $1 billion bond was supposed to go on sale in mid-March, as previously reported. In early February, El Salvador congressman William Soriano said on Twitter that the Bitcoin bond would go live in the second or third week of March.
El Salvador’s president, Nayib Bukele, first revealed the bond’s plans in November 2021. The bond is said to have a 6.5 percent coupon and a Bitcoin payout of 50 percent of the cryptocurrency’s price increase after five years. The “Bitcoin City,” a development dedicated to geothermal energy-powered Bitcoin mining using nearby volcanoes, will get half of the $1 billion estimated revenues from the sale. The remaining $500 million will be put into Bitcoin directly.
El Salvador’s decision to postpone the introduction of the Bitcoin bond comes as the government appears to be slowing down its purchases of fresh Bitcoin. The Salvadoran government has not reported a new Bitcoin purchase since January 2022, after previously disclosing monthly acquisitions.
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