El Salvador postpones issuing of Bitcoin bonds

Thursday 24 March 2022 14:16 CET | News

The government of El Salvador has decided to postpone the issue of a Bitcoin- (BTC)-backed bond due to the unfavourable market conditions fuelled by the geopolitical crisis.

El Salvador’s ‘Volcano Bond’ will not go live in March as the Salvadoran government expected previously, Finance Minister Alejandro Zelaya said. Zelaya claimed that the delay was due to the volatile prices of BTC fuelled by the Russia-Ukraine crisis. He added that the government of El Salvador decided to wait for favourable conditions in the financial market, expecting September at the latest.

As previously reported, the USD 1 billion BItcoin bond was originally scheduled to launch in mid-March. El Salvador Congressman William Soriano took to Twitter in early February to declare that the Bitcoin bond was expected to go live by the second or the third week of March.

El Salvador President Nayib Bukele originally announced plans for the bond in November 2021. The bond is reportedly marketed with a 6.5% coupon and a Bitcoin dividend of 50% of the gain in the cryptocurrency price after five years. Half of the USD 1 billion expected proceeds from the issuance are set to go toward the construction of the ‘Bitcoin City,’ a development dedicated to geothermal energy-powered Bitcoin mining using nearby volcanoes. The rest of USD 500 million is set to be invested directly into Bitcoin.

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Keywords: crypto, digital assets, central bank, Bitcoin, CBDC
Categories: DeFi & Crypto & Web3
Countries: El Salvador
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DeFi & Crypto & Web3

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