The bonds backed by Bitcoin (BTC) that the Salvadoran government will launch will be available in February and March 2022. Alejandro Zelaya, the Minister of Finance of the Central American country, recently confirmed that information.
The official hopes that the bonds strategy will allow El Salvador to raise USD 1 billion. He said that the money would help build the Bitcoin City and acquire more BTC. According to information publicly available, the nation has 1,391 BTC in its coffers at the moment.
Zelaya explained that they would evaluate how the issuance of Bitcoin Bonds turns out before they draw up the whole strategy.
Ricardo Castaneda, an economist at the Central American Institute for Fiscal Studies, gave his opinion. This professional considers that Bitcoin Bonds are a desperate measure but recognizes it could be successful.
The Bitcoin Bonds Could Help El Salvador Become Independent from Multilateral Agencies
If the Bitcoin bonds strategy goes right, President Bukele will be an example. Then he will tell multilateral organizations and the international community that the country does not need them. However, Castaneda warned that the entire Salvadoran population would lose if it went wrong.
Zelaya disagrees with those opinions since the launch of those bonds does not imply leaving the traditional financial market. He stated that El Salvador is now competing to be a regional debt market, for which he would not do that.
The Minister of Finance said they could go to New York, create a Bitcoin bond, or deal with a multilateral agency. He even suggested that they could hire a private investment bank to help them.
The government representative denied that the launch of those assets would harm the relationship with international organizations, particularly the International Monetary Fund (IMF). He added that the negotiations have not stopped, except for those analysts adverse to Bukele.
The Salvadoran Government Prepare Laws to Receive the Bitcoin Bonds
The Salvadoran government announced that the launch of the Bitcoin Bonds would take place in February or March. However, they pointed out that they still need to make final adjustments to allow their issuance. In that regard, they recently sent a score of bills to the Legislative Assembly to provide a solid legal basis for those assets.
The digital issuance of Bitcoin Bonds, which will give an annual yield of 6.5% in US dollars, will occur on the Liquid sidechain. Samson Mow, a director of the Blockstream firm, said that El Salvador would issue other bonds with similar characteristics.
El Salvador is the first country to adopt the pioneering cryptocurrency as legal tender, which governments from other countries do not overlook. Although the Central American nation has undergone several problems since the approval of the Bitcoin law, they trust it as a store of value.
Bitcoin is currently trading at around USD 43,716 and has accumulated a loss of 5.4% in the last 24 hours. Its daily trading volume is above USD 31.91 billion, and its market capitalization is about USD 827.15 billion, according to CoinGecko.
By Alexander Salazar
