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El Salvador postpones Bitcoin bonds until September

Updated: Aug 31, 2024
Published: Mar 23, 2022
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El Salvador has postponed the planned issuance of $1 billion worth of Bitcoin bonds due to unfavourable market conditions, Finance Minister Alejandro Zelaya said on the Salvadoran program "Frente a Frente"

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El Salvador delays the issuance of Bitcoin bonds

El Salvador's "volcano bond" will not hit the market in March as expected by the Salvadoran government. Finance Minister Alejandro Zelaya said the delay was due to volatile BTC prices fuelled by the Russia-Ukraine crisis. He added that the government of El Salvador has decided to wait for favourable conditions in the financial market, which are expected no later than September.

Zelaya also addressed some of the concerns about the Bitcoin bonds. He explained that the country will issue the bonds through the state-owned geothermal company LaGeo. The finance minister pointed out that LaGeo is controlled by another state-owned company, Comisión Ejecutiva Hidroeléctrica del Río Lempa (CEL). Both are considered autonomous companies controlled by the state.

The country wants to create ‘Bitcoin City'

In November 2021, President Nayib Bukele announced plans to build a "Bitcoin City" to be financed by selling bonds with an annual coupon of 6.5%. Half of the funds will be used for Bitcoin (BTC) accumulation, while the rest will be earmarked for infrastructure and Bitcoin mining with geothermal energy.

A survey conducted by the El Salvador Chamber of Commerce found that only 14% of businesses surveyed reported actually using the cryptocurrency since the revolutionary Bitcoin law was passed, showing that the country still has a long way to go before Bitcoin is fully adopted.

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