A former Finance minister in El Salvador claims that the country’s Bitcoin bonds are delayed due to a lack of interest among the investors.
El Salvador’s proposed $1 billion bitcoin bond was supposed to be offered between March 15 and 20. The bitcoin bond that was claimed to have a substantial oversubscription is at a pinpoint of doubt as to whether the proposed bonds will be released or not.
El Salvador’s former finance minister claimed that Bukele’s Bitcoin bonds are witnessing the delay as the interest among investors seems to have dropped considerably.
Are El Salvador’s bitcoin bonds no more?
Economist Carlos Acevedo, who also used to be the central bank president of El Salvador, told a news channel that” negotiations from the IMF over a $1.3 billion loan are ‘practically dead.'”
Acevedo also said that the $ billion bond is virtually impossible because of the dropping investor demand. He added that bitcoin, which was meant to solve the problems in the country, is instead creating more.
He claimed that Bukele’s announcement about the “volcano bonds’ created a splash when he disclosed the plans in November. Bukele had planned to invest half of the funds into bitcoin while the other half would be utilized for crypto mining infrastructure in the country.
But witnessing the longing delay for the bonds, Acevedo said:
“First they said that in January, then in March, then they said that the Digital Assets Law was not ready, then that pensions were a priority, now the issue of security; I believe that the government has realized that there is not enough interest in the markets”
Acevedo
What triggered the delay?
El Salvador’s security and safety were one of the spiking issues lately, as there was a skyrocketing increase in gang-related murders. Bukele had imposed a state of emergency and also had to step back from attending the Bitcoin Conference 2022 in Miami.
Alejandro Zelaya, the current finance minister, said last month that the country wants to suspend the issuance of volcano bonds until the market conditions are favorable. They even cited the Russia-Ukraine war as a reason for the delay.
Luis Membreño, an El Salvador economist who shared his comments to the local news, highlighted Michael Saylor’s remarks that the financial markets are not quite ready for Bitcoin bonds.
“No one believes the minister of finance anymore, he has said so many things that have not happened, that he is no longer a reliable source of information. Therefore, I think the trend is that there will be no chance of Bitcoin Bonds and I think the moment passed the previous year.”
Luis Membreño
At the moment, dropping the volcano bonds can lead to spiking backlashes. For a country that promised to launch Bitcoin city and set an example by accepting Bitcoin as a legal tender, dropping the bonds might not be the wisest decision.