Despite showing the most initiative in Bitcoin-related innovations, El Salvador’s government said it’s not yet time for the much anticipated Bitcoin bonds to launch. As Bitcoin (BTC) still floats around the $30,000 area, the bonds would indebt the small Central American country.
Patience is the Key for El Salvador
The original plan included the first bonds being released in March. Three months later, the trademark Volcano bonds are still not released and the Minister of Finance Alejandro Zelaya explains ‘it’s still not the right time, as Bitcoin’s price is still troubled’. Be that as it may, this happened before, as the government of El Salvador decided to postpone the Volcano bonds for the same reason. However, there’s one difference – Mr. Alejandro Zelaya didn’t give any provisional date of when the bonds will be available.
El Salvador delays its planned launch of #Bitcoin bond.El Salvador's Finance Minister Alejandro Zelaya expressed confidence that Bitcoin would appreciate in value in the long run.By @CMCAlexandria Read more! https://t.co/ezSp9IVCBjThe $1 billion bond sale might have to wait till Bitcoin (BTC) regains its price after the crypto market crash that happened after Do Kwon’s Terra (LUNA) and Terra’s native stablecoin UST dramatically went down to pennies.— CoinMarketCap (@CoinMarketCap) June 3, 2022
Therefore, waiting for Bitcoin’s (BTC) price to fully recover might be a smart move for El Salvador. For instance, if the $1 billion bonds are backed with the current price of about $30,000 per BTC, President Nayib Bukele and his team would have to double the expenses when the bonds mature, if compared to the $65,000 mark that Bitcoin (BTC) has reached in November 2021. Apart from that, the small Central American country also owes $800 million that must be covered by January 2023. Needless to say, many investors and finance experts are skeptical about El Salvador’s chances of paying back the loan in time.
El Salvador has $800 million in US dollar denominated debt due next year. It is currently trading at distressed levels (priced to yield ~35%). $BTC pic.twitter.com/QNfHc4EKGQDigital Securities Bill is Yet to Be Signed— Doomberg (@DoombergT) January 16, 2022
In addition, that’s not the only obstacle. The government of El Salvador is apparently lacking legislation that’s needed for sale of these bonds. The congress is awaiting for the digital securities bill from the government that’s obligatory for the issuance of these Bitcoin (BTC) bonds.
On The Flipside
- El Salvador’s Nayib Bukele spends $15 Million on BTC, gets ‘the dip’ once again
- Nayib Bukele presents Golden Bitcoin City model
- El Salvador sets up a meeting with officials from 44 countries to discuss Bitcoin
