After delaying on several occasions the launch of so-called “Bitcoin Bonds” – securities backed by Bitcoin – the government of El Salvador has suggested that it will wait for the price of the cryptocurrency to rise before issuing the promised $1 billion in bonds.
The price of the biggest cryptocurrency on the market has dropped more than 15% in the last month. At the time of writing this article, BTC is trading at $38,242, according to data from CoinMarketCap, down almost 2% in the last 24 hours.
El Salvador Bitcoin Bonds
The issuance of Bitcoin bonds, which were also dubbed “Volcano Bonds”, was announced by Chairman Nayib Bukele in November 2021.
As reported by CriptoFácil, the Minister of Finance of El Salvador, Alejandro Zelaya, informed that the bonds would be launched between the 15th and 20th of March.
However, March 20th arrived and no official announcement was made. On March 23, Zelaya reported that the government was waiting for the right moment to launch the bonds. Furthermore, he confirmed that he was all set:
“In terms of issuing Bitcoin bonds, we are ready to do so. We wait for the right moment and for the president to say ‘yes, let’s do this now’. I don’t think it’s time yet, we have to wait a few more days.”
President Bukele took to Twitter on the same date to explain the delay:
“The slight delay in issuance is only because we are prioritizing pension reform and we have to send this to Congress first.”
Bitcoin Priorities or Low Price?
However, although Bukele claimed priority issues, Zelaya indicated last Monday (2) that the delay was due to the low price of BTC, as reported by Diario El Mundo.
In addition, he informed that the previously disclosed deadline was not a final deadline. This is because, at the international level, ideal market conditions did not exist due to variables that cannot be controlled.
The minister noted that the price of Bitcoin, like any asset listed on traditional stock exchanges, has been affected both by Russia’s invasion of Ukraine and the United States Federal Reserve (Fed)’s attempt to raise interest rates to tackle inflation. in the economy.
“As the quoted price (of Bitcoin) against hard currencies is affected, for some investors this discourages the purchase of the security. So normally it should be done when the price is high,” he said. “Why? Because when we say the price is high, that’s when it’s actually being measured against dollars. So for every Bitcoin they will give more dollars. So I have an incentive to buy the Bitcoin bond so I can earn because my national accounts are in dollars.”
Based on this, Zelaya said that the initiative cannot be said to have failed. After all, the stock market conditions were not right:
“The President of the Republic is the one who tells us the right time, according to the way we see the market”, he added in an interview.
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