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El Salvador’s Bitcoin bonds could not be launched any time soon. The delay could be attributed to the slump in cryptocurrency prices, given the global cryptocurrency market is over 50% below the all-time high of over $3 trillion created in October last year.
The Salvadoran Finance Minister, Alejandro Zelaya, has said that it was not the ideal time to launch the Bitcoin bonds because Bitcoin’s price was still “troubled”.
El Salvador Bitcoin bonds delayed
Zelaya’s remarks make it the second time that the government of El Salvador has delayed the launch of these Bitcoin bonds. The official also failed to mention the exact date when these bonds would be issued.
Bonds tend to be critical assets for a country, and El Salvador cannot issue these bonds until it is confident it can repay the debt. A recovery in Bitcoin’s price could support the launch of these bonds. At the current bearish state, the government could pay a high amount for these bonds if the price recovers. Therefore, the bonds would be best launched during a bull market.
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In an interview with The Block, Ricardo Castaneda, an economist with the Central America Institute for Fiscal Studies, said El Salvador had a debt obligation of $800M to be settled in January. Currently, the country is not guaranteed to get these funds.
Therefore, the country’s president, Nayib Bukele, had to ensure that the Bitcoin bonds would not indebt the country further. The Salvadoran government is currently committed to issuing one billion dollars worth of Bitcoin bonds if the right conditions are met.
El Salvador buys the Bitcoin dip
Bitcoin’s price has witnessed a notable decline this year. The token price reached an all-time high of $69,000 in November last year, and despite the ongoing bearish trend, El Salvador has continued to be bullish on Bitcoin.
El Salvador currently has over 2301 Bitcoins, and the country’s president, Nayib Bukele, is still buying the dip. Zelaya said that the country did not plan to sell any of the purchased Bitcoin. When Bitcoin reached an ATH last year, the country sold the surplus Bitcoin for around $4M.
There is no exact date when the bonds will be launched, but it could happen before the end of the year. The issuance would help the country meet its debt obligations and facilitate the construction of the Bitcoin City.
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