The launch date for Salvador Bitcoin Bonds, the instrument that will serve to build the announced Salvadoran Bitcoin City, is not yet known. Announced for issuance earlier this year, the launch has been affected by the current war in Ukraine and a slowdown in global markets. According to Finance Minister Alejandro Zelaya, El Salvador is still waiting for favorable market conditions.
El Salvador Bitcoin Bonds Launch date unknown
The government is reviewing the launch date for Salvadoran bitcoin bonds, the proceeds of which are to be used to finance the construction of Bitcoin City, a city that will have a 0% income tax and will be carbon neutral thanks to the geothermal energy that powers its operations. Alejandro Zelaya, El Salvador’s finance minister, explained that market conditions and the war in Europe have affected the terms of these bonds.
In an interview with local television, Zelaya said:
We are waiting for the right moment, and the president will say when… It depends on how the market is doing.”
El Salvador’s bitcoin bonds were expected to be issued within the first three months of this year using technology provided by Blockstream and its Liquid network. The country advanced the rules for issuing these debt instruments back in January. However, the announced issuance period has passed and the bonds have still not been issued.
Zelaya also stated that there are other reasons affecting the issuance of Salvadorian bitcoin bonds, such as the sudden drop in the cryptocurrency market. This drop in the price of BTC may make investors wary of investing in these instruments.
The minister mentioned the bond launch in March, saying that conditions at the time were unsuitable for a bond issue, and hinted at a possible future issue in May or June, mentioning September as the last potential launch date.
Local opinions on bitcoin bonds
However, local economists have a different opinion as to why these bonds were not issued. Tatiana Marroquin, an economist from El Salvador, told local media that there are contradictions within the government that prevent the bonds from being completed.
As for the bitcoin price argument, she explained:
Technically the price argument is invalid, if the price is low now, people hope it will go up, take a bitcoin bond that is worth 30 now, and at some point it will be worth 60, because that will be the biggest incentive for investors.
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