El Salvador’s Bitcoin Volcano Bonds Launch Still on Hold, According to Treasury Minister

The date of the launch of the Salvadoran bitcoin bonds, the instrument that would serve to build the announced Salvadoran Bitcoin City, is still unknown. Announced to be released earlier this year, the launch has been affected by the current war in Ukraine, and the deceleration of global markets. According to Treasury Minister Alejandro Zelaya, El Salvador is still waiting for favorable market conditions.

The government is reconsidering the launch date of its Salvadoran bitcoin bonds, whose funds are to be used to finance the construction of the Bitcoin City, a city that would feature a 0% income tax and be carbon-neutral due to the geothermal energy powering its operations. Alejandro Zelaya, El Salvador’s minister of treasury, explained that the market conditions and the war in Europe had affected the conditions to issue these bonds.

In an interview on local TV, Zelaya stated:

We are waiting for the right moment and the president says when… It depends on how the market is.

The Salvadoran bitcoin bonds were expected to be launched during the first three months of the year, using the technology provided by Blockstream and its Liquid network. The country had advanced regulations for the issuance of these debt instruments since January. However, the announced issuance period passed, and the bonds were not issued.

Zelaya also claimed there are other reasons affecting the issuance of the Salvadoran bitcoin bonds, like the sudden fall of the cryptocurrency market. This fall in the price of BTC could be making investors wary of putting money into these instruments.

The minister referred to the launch back in March, stating conditions were not right for the issuance of the bonds at that time, and hinted at a possible future issuance in the months of May or June, mentioning September as the latest potential date for launch.

However, local economists have other opinions when it comes to the reasons why these bonds have not been issued. Tatiana Marroquin, a Salvadoran economist, stated to local media that there were contradictions in the government preventing the issuance of the bond to be completed.

On the bitcoin price argument, she explained:

Technically the price argument is not valid, if the price is low right now, people are hopeful that it will go up, take out a bitcoin bond that is worth 30 right now and that will be worth 60 at some point because it would be the biggest incentive for the investors.

What do you think about the delay in the issuance of the Salvadoran bitcoin bonds? Tell us in the comments section below.