Welcome back to the Tribe! In this post we dive into El Salvador’s Bitcoin Bond and why there is a delay with it.
Nothing should be considered investment or financial advice. Enjoy the ride!
The Central American country which was the first to make Bitcoin a legal tender, slated last week for the issue of an unprecedented bitcoin-backed bond. But this plan will be delayed till the markets are favorable.
El Salvadore, the first country to make Bitcoin a legal tender, earlier proposed to issue a bitcoin-backed bond worth about $1 billion USD.
The central American government earlier scheduled to launch the bond between March 15-20, but now it seems there will be a change to it.
According to a report by Reuters, the country’s Financial Minister Alejandro Zelaya announced that the government has decided to postpone the issue of the bonds
According to him, the reason for this is to wait for more favorable conditions in the financial markets before issuing the bonds. The war between Russia and Ukraine and the volatility of Bitcoin prompted this delay.
In an interview with a local television channel, Alejandro Zelaya said “I think this is not the time. There are some moves on the planet,” expressing his doubts that the issue will go through as proposed.
The country had earlier planned to use $500 million USD of the proceeds of the bonds to fund the building of a “Bitcoin City.” the city would be the first of its kind and would be located in the Gulf of Fonseca near a volcano. According to the president, the government also plans to find a power plant by the volcano to provide energy for both the city and bitcoin mining.
He also added that the city will be a tax haven for mining activities and will be a full-fledged metropolis with residential and commercial areas, restaurants, an airport, and a port and rail service.
Since September 2021, the country has been accumulating Bitcoin and holds 1,801 BTC bought with public funds within this period. The current volatility in the market has reduced the country’s investment by 20% making it an unfavorable time to issue bonds backed by its bitcoin holdings.
Further action from the Government concerning the bond will be based on the directions of the market. According to the Finance minister, the bond issue could be postponed to as late as September based on the market’s direction.
In an interview with a local news channel, the minister also said concerning the new date of the issue of 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),”
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The post Unfavorable Market Conditions Delay Issue Of El Salvador’s Bitcoin Bond Worth $1B appeared first on San Francisco Tribe.
Unfavorable Market Conditions Delay Issue Of El Salvador’s Bitcoin Bond Worth $1B
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