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El Salvador has announced plans to release a Bitcoin-backed bond. The Salvadoran government has stated that the issuance of the bond will be suspended due to the Russia-Ukraine crisis.
El Salvador’s president. Nayib Bukele stated that the country would issue this bond to fund a “Bitcoin City.” Moreover, the Bitcoin bond would also support the additional purchases of Bitcoin.
El Salvador’s $1B Bitcoin bond
The Russia-Ukraine crisis has dealt a major blow to the financial sector, including the crypto market. The prices of Bitcoin and other cryptocurrencies have plummeted since the beginning of the year.
This negative market performance has affected El Salvador’s Bitcoin bond timeline. The finance minister in the country, Alejandro Zelaya, noted that the Bitcoin bond was to be launched in a few days, but the ongoing war in Ukraine affected this.
“We believe that between Mar. 15 and 20 is the right timing. We have the tools almost finished. But the international context will tell us… I didn’t expect the war in Ukraine,” Zelaya noted.
The Salvadoran government had announced the release of 20 bills for a Bitcoin bond. The Bitcoin bond dubbed EBB1 would allow the Salvadoran government to issue Bitcoin-backed bonds valued at $1 billion. Half of the money raised from this bond would go towards buying Bitcoin, while the rest would be used to invest in energy and mining infrastructure.
El Salvador’s Bitcoin plans
The Salvadoran government has been focused on plans of investing in Bitcoin. The country plans to create a Bitcoin City that will focus on innovative businesses surrounding Bitcoin and the crypto sector. Bukele noted that this city would be powered entirely by the Conchagua volcano.
El Salvador adopted Bitcoin as legal tender in September last year. The country has a significant Bitcoin holding, with its latest purchase happening on January 24 when the prices were around $49,100.
El Salvador’s approval of Bitcoin as legal tender has attracted the attention of global regulators, including the International Monetary Fund (IMF) and the World Bank. However, the government has been adamant in its plans despite the scepticism.
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