- The decision has been taken by Finance Minister Alejandro Zelaya to wait for favorable market conditions before launch.
According to Finance Minister Alejandro Zelaya’s announcement on Tuesday, El Salvador postponed an unprecedented issue of a bitcoin-backed bond scheduled for last week. It is postponed because the government decided to wait for favorable financial market conditions.
The Central American government planned to launch the $1 billion bond between March 15 and 20. But the conflict between Russia and Ukraine and the volatility of the cryptocurrency forced authorities to change the date.
According to Zelaya, now is not the time to issue the bond, who stated during an interview with a local television channel that the best time to go on the market is in the first half of the year. He added that “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)”.
Last week, Zelaya hinted at a possible delay of El Salvador’s Bitcoin bond, citing the world’s unstable political situation as one of the main reasons for the delay. As previously reported, the $1 billion bond was supposed to go on sale in mid-March. However, El Salvador congressman William Soriano announced in early February that the Bitcoin bond would be available by the second or third week of March.
El Salvador’s Bonds Announcements
El Salvador’s president, Nayib Bukele, first announced the bond’s plans in November 2021. Finally, the bond is reportedly being marketed with a 6.5% coupon and a Bitcoin dividend of 50% of the cryptocurrency’s price gain. Half of the expected $1 billion proceeds from the issuance will be used to build “Bitcoin City,” a development dedicated to geothermal energy-powered Bitcoin mining using nearby volcanoes. The remaining $500 million will be invested in Bitcoin.
El Salvador’s delay in launching the Bitcoin bond coincides with the government’s apparent slowing of new BTC purchases. Previously reporting monthly Bitcoin purchases, the Salvadoran government has not announced a new purchase since January 2022.