Last week, El Salvador was scheduled to issue its $1 billion Bitcoin volcano bonds, however, things don’t seem to have materialized as per the timeline. As reported by Reuters, El Salvador Finance Minister Alejandro Zelaya said that they would be waiting for favorable market conditions to bring these bonds to the market.
The government had previously scheduled the launch of the bonds between March 15-20. However, the rising inflation and geopolitical uncertainty have brought much pressure on risk-on assets like crypto.
As per Reuters report, the launch of the Bitcoin bond could be postponed to September this year. From its high of $69,000 back in November 2021, Bitcoin (BTC) has already corrected 40% and is currently trading around $42,200 levels.
Zelaya said that this is not the right time to issue bonds. During an interview with local television, the Finance minister said that an ideal date was to go to the market in the first half of the year. He added:
“In May or June the market variants are a little different. At the latest in September. After September, if you go out to the international market, it is difficult (to raise capital)”.
Does El Salvador have enough demand for its Bitcoin Bonds?
It seems investors remain divided over the demand for El Salvador bonds. As we reported, some retail players in El Salvador are showing up interest. However, a large number of institutional players have been waiting on the sidelines.
El Salvador is planning to restructure its sovereign debt by issuing Bitcoin bonds. However, some of the top financial bodies like the IMF have asked El Salvador to take down its decision of making Bitcoin a legal tender stating that it adds to the company’s financial instability.
On the other hand, other countries like Mexico are willing to adopt a similar path and make Bitcoin legal.
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