El Salvador: Has the time to launch the Bitcoin bond finally come?

Lavina Daryanani
Source: Ledger Insights

Towards the end of March, El Salvador postponed the issue of its much-awaited Bitcoin-backed bond. Finance Minister Alejandro Zelaya had stated back then that the government had decided to wait for favorable conditions in the financial market to unfold before the launch.

As such, the government had scheduled the launch of the $1 billion bonds between 15-20 March, but the war between Russia and Ukraine and the volatility of the cryptocurrency prompted authorities to change the date.

Now, in what is the latest update, Zelaya proclaimed that the country would further delay the bond launch because the price of Bitcoin was still “troubled.” Further elucidating on the same in a recent interview on the local “Frente a Frente” news program, the minister said,

“No, not yet, the [Bitcoin] price continues to be disrupted by the war in Ukraine.

He went on to clarify that the nation had no plans of abandoning their Bitcoin and would continue to cling to the asset.

Zelaya also expressed his optimism about the asset and went on to add,

“In the short term the variations are constant but in the long term, it always tends to appreciate in value… There is a future and there is an economic innovation [in Bitcoin] that we must bet on.”

Back in March, Zelaya stated that the launch could be pushed all the war to September. However this time, he did not mention any tentative issuance date but just claimed that it’s still not the time.

The bond launch plan saw sunlight for the first time in November 2021 when the country’s president Nayib Bukele announced the same. 50% of the $1 billion expected is to fund the construction of a Bitcoin City built near a volcano. The idea behind the movie revolves around the notion that the volcano’s geothermal energy could be used by Bitcoin miners to mine the crypto. The other 50% of the funds raised would be invested into Bitcoin.