Despite showing the most initiative in terms of Bitcoin-related innovations, El Salvador’s government has said that it is not yet time for the much anticipated Bitcoin bonds to launch. With Bitcoin (BTC) still floating around the $30,000 level, the bonds would likely indebt the small Central American country.
Patience Is Key for El Salvador
The original plan outlined that the first bonds would be released in March. Howver, it is now three months later, and the trademark Volcano bonds have still not been released. Minister of Finance Alejandro Zelaya explains that “it’s still not the right time, as Bitcoin’s price is still troubled”. Be that as it may, this has happened before, and this marks the second time that the government of El Salvador has decided to postpone the Volcano bonds—and for the same reason. However, there is one difference: Mr. Alejandro Zelaya did not give a provisional date for when the bonds would be available.
The $1 billion bond sale may have to wait until Bitcoin (BTC) regains its price, which has suffered greatly in the wake of the crypto market crash, catalyzed by the collapse of Do Kwon’s Terra (LUNA) and the Terra native stablecoin UST.
With that in mind, waiting for Bitcoin’s (BTC) price to fully recover could be a smart move for El Salvador. For instance, if the $1 billion bonds were backed at the leading asset’s current price of ~$30,000 per BTC, President Nayib Bukele and his team could end up facing double the expenses when the bonds mature, compared to the $65,000 mark that Bitcoin (BTC) reached in November 2021. compounding this risk, the small Central American country already owes $800 million, a fee which must be covered by January 2023. Needless to say, many investors and finance experts are skeptical about El Salvador’s chances of paying back the loan in time.
Digital Securities Bill Is Yet to Be Signed
It doesn’t end there though. The government of El Salvador reportedly lacks the proper legislation required for the sale of such bonds, and Congress is awaiting the proposal of a digital securities bill from the government to successfully legalize the issuance of the Bitcoin (BTC) bonds.