El Salvador has postponed the planned $1 billion Bitcoin bond issuance due to unfavorable market conditions, Finance Minister Alejandro Zelaya says on El Salvador’s “Frente a Frente” program
El Salvador delays issuance of bitcoin bonds
El Salvador’s “volcanic bond” will not hit the market in March, as the Salvadoran government had expected. Finance Minister Alejandro Zelaya said the delay was due to BTC price volatility fueled by the Russia-Ukraine crisis. He added that the Salvadoran government has decided to wait for favorable conditions in the financial market, which are expected no later than September.
Zelaya also addressed some of the concerns regarding bitcoin bonds. He explained that the country will issue the bonds through state-owned geothermal company LaGeo. The Minister of Finance pointed out that LaGeo is controlled by another public company, Comisión Ejecutiva Hidroeléctrica del Río Lempa (CEL). Both are considered stand-alone state-controlled enterprises.
The country wants to create “Bitcoin City”
In November 2021, President Nayib Bukele announced his intention to build a “Bitcoin City” which would be financed by the sale of bonds with an annual coupon of 6.5%. Half of the funds will be used for the accumulation of Bitcoin (BTC), while the rest will be allocated for infrastructure and the mining of Bitcoin with geothermal energy.
A survey conducted by the Chamber of Commerce of El Salvador found that only 14% of companies surveyed said they actually use cryptocurrency since the passing of the groundbreaking Bitcoin law, showing that the country still has a long way to go. to go before Bitcoin is fully adopted.