Last Updated: 31 August 2022
The issuance of bitcoin bonds in El Salvador has been delayed again, a logical consequence of the current bear market. According to an interview that the business magazine, Fortune, conducted with Paulo Ardoino, the chief technology officer at Bitfinex and Tether.
With the bond round, the Latin American country aims to raise $1 billion from the market, an ambitious plan announced by President Nayib Bukele in November 2021 when the price was still above $60,000. This round was originally due to start in March 2022 but has been postponed again. The bonds would be backed by bitcoin from the state treasury, and bitcoin is yet to be mined from volcanic energy, hence the title ‘Volcano bonds.’
NEW: We're nearing the one-year anniversary of El Salvador adopting Bitcoin as legal tender, and the month that the $1 billion Bitcoin bond was set to launch. So where is it?
— Leo Schwartz (@leomschwartz) August 30, 2022
Ardoino now says he believes this financial product will see the light of day this year. The delay is due to the current negative sentiment in the market. Also, the framework of rules in El Salvador is not yet ready, as the country’s congress has yet to approve the issue. To Bukele’s advantage, his political party has the majority in the country.
Bitfinex is helping to market the bonds by opening up its trading platform. People like Max Keiser and Samson Mow also helped design the product. According to Ardoino, the government will give its green light before September this year.
Then it will take another two to three months before it is technically ready for the market. That would mean we would see the launch before the end of 2022, more than a year after the announcement.
In February, El Salvador’s Finance Minister Alejandro Zelaya blamed the war between Ukraine and Russia for the delay.
The country of El Salvador has acquired some 2,301 bitcoins since September for about $103.9 million, while their value has since dropped to $45 million. The last purchase was 80 bitcoin at an average price of $19,000.