According to a Fortune article, El Salvador’s so-called Volcano Bond issue is still experiencing delays due to a lack of investor interest and a legislative snag. Earlier this year, the government planned to issue $1 billion BTC supported bonds.
Legislation Delays Could Be the Reason
Soon after El Salvador became the first nation in the world to use bitcoin as legal cash in November, President Najib Bukele revealed plans to raise $1 billion through bonds backed by bitcoin (BTC). The planned debut date for the offering was set for early 2022, but delays have occurred because of the falling price of bitcoin, at least in part.
Despite having a large majority in the legislature, President Bukele’s New Ideas party must still get the required legislation approved by El Salvador’s Congress for the bond to be issued. Chief Technology Officer of Bitfinex and Tether Paolo Ardoino, who has collaborated closely with El Salvador on the bitcoin project, says officials have informed him to anticipate passage in September.
If that occurs, according to Ardoino, it will take another two to three months to roll out the Volcano Bond, indicating that the sale might occur before the end of 2022.
The government of El Salvador did not immediately answer an inquiry for comment.
Alejandro Zelaya, El Salvador’s finance minister, predicted that the bond offering would take place between March 15 and March 20 in February, but he later attributed the delay to the conflict between Russia and Ukraine.
Project Still in Planning
The Volcano token project was still moving forward, according to Ardoino. Because of Bitfinex’s important position in El Salvador, some people have theorized that it and its sister business, Tether, are the owners of government bonds. Regarding the investments by the companies, Ardoino declined to comment.
According to information gathered from Bukele, El Salvador has purchased 2,301 bitcoins since last September for about $103.9 million. Those bitcoins are presently worth roughly $45 million. The most recent purchase was made on July 30, when the nation paid $19,000 for each of 80 coins.
According to William Snead, a Latin America analyst at BBVA, El Salvador’s traditional bonds were among the poorest returns in the area because of the anticipated Volcano token issuance and the government’s capacity to service its debt. Snead expressed uncertainty that the Volcano coin will launch due to the turbulence in the cryptocurrency market.
In addition to announcing a $560 million program to buy back some of its sovereign debts in July, the Salvadoran government indicated it would handle the Volcano token, although Marshik expressed doubts about that claim.
“It doesn’t make sense to me,” she remarked, pointing to the markets where Bitcoin is trading and the significant losses. Fortune. This is an administration that has consistently overpromised and fallen short of expectations.
Bitcoin Beach Elsavador
Meanwhile, El Salvador’s government is making several infrastructure improvements to Bitcoin Beach, a beach in El Zonte. The adoption of bitcoin to create a circular economy in the region has made the beach famous. These funds will be used to construct a new amenities so visitors can appreciate the area more fully.
Sourced from crypto.news.
Written by Wayne Jones on 2022-09-01 17:30:00.