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El Salvador’s Bitcoin Bond Launch Faces Uncertainty Amid Ukraine War

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El Salvador’s highly anticipated Bitcoin Bond is slated to go live somewhere between March 15 and 20. But according to the nation’s finance minister Alejandro Zelaya, the timeline for the scheduled launch might get affected due to the ongoing situation in Ukraine. In an interview with a local TV channel, Zelaya expressed apprehension stating,

“We believe that between March 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. We’re still finishing some details, almost everything is ready, the thing is there is also a timing issue.”

President Nayib Bukele is aiming to issue his country’s first-ever $1 billion bitcoin-backed bonds this month and use the proceeds to purchase more cryptocurrencies and build “Bitcoin City” – a planned metropolis that would utilize geothermal energy from a nearby volcano to “mine” the digital coins.

El Salvador’s Big Bitcoin Gamble

Former president of El Salvador’s central bank, Carlos Acevedo reportedly warned that a “lot of doors will close” if this is a failure, adding that the bond’s issuance is going to “define a lot.” According to sources, large-cap investors are keeping close tabs on the bond but those traders are few in comparison to retail investors which are expected to dominate the lot.

One such investor, Josué País, the owner of a taxi business that accepts payments in BTC, said that he plans to invest $200 into the bond when it launches this week.

In another instance of the crypto-loving President’s betting high, Bukele in February tweeted that he’s sending 52 legal reforms to El Salvador’s congress, including offering “citizenship in exchange for investments,” saying his plan will “create a haven for freedom.”

That said, if words turn into a reality, El Salvador would be one of the first countries to offer citizenship to foreign investors, joining the likes of Turkey, Malta, and several other Caribbean nations, according to U.K.-based citizenship consultancy Henley & Partners.

However, this isn’t his first time offering citizenship to foreign investors, as he said last year El Salvador plans to offer fast-tracked citizenship to investors that invest in the country’s proposed bitcoin fund.

El Salvador govt to send 20 bills for approval of the issuance of Bitcoin Bonds

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The finance minister of El Salvador, Alejandro Zelaya, said that the government will be sending 20 bills to Congress to start the process of issuing Bitcoin Bonds in the country.

In an interview, on Tuesday, with local media, Zelaya said that the bills would function as the framework to the legal structure and legal certainty to everyone who buys the Bitcoin bond. He mentions that this is to create a structure to cover the corresponding market regulation and issuance of crypto asset security.

It has been stated by the government that $1 billion will be issued in bonds this year and that it would carry a token of 6.5% Accordingly, half of the bonds will be used to acquire Bitcoin (BTC) and the other half will be used to build infrastructure and in Bitcoin mining, El Salvador hopes to make profit from this. The bond is meant to encourage President Nayib Bukele’s dream of creating the world’s first ‘Bitcoin City’.

The Bitcoin City is said to be completely tax-free for the holders of Bitcoin in the east of the country which is powered by geothermal energy from the volcanoes around.

In addition to stating that the government was drafting appropriate legislation for the bonds to be released, finance minister Zelaya said,

“We are the first country to release a Bitcoin bond. And because we are the first country to do this, it needs to be regulated.”

Bitcoin (BTC), a legal token in El Salvador

In light of recent events, El Salvador became the world’s first country to make Bitcoin a legal tender. Subsequently, enterprises must now accept it if they have the technological means. This move has been criticized by the World Bank, IMF many global credit rating agencies. Although, the Bitcoin community has been moved by this act of support by the Central American country.

President Nayib Bukele, recently took to Twitter to announce that these bills are more than just a draft of the legislation of the bonds.

The country’s Bitcoin evangelist President has shown constant support through his announcements about projects related to cryptocurrency and Bitcoin Bonds, of which the most recent being ‘The Bitcoin City’. At the time of writing, Bitcoin (BTC) was priced at $46320.29 with a daily drop of 0.86%.