Despite making grandeur plans on Volcano bonds backed by Bitcoin (BTC), El Salvador has a bumpy road ahead, as President Nayib Bukele’s government is facing a lack of interest from investors, legal vagueness, and a massive debt to be paid off starting in January 2023. Amid the confusion, Paolo Ardoino, the CTO of both Tether (USDT) and the Bitfinex crypto exchange, has stepped in to offer his prediction on when the highly anticipated bonds will become available.
El Salvador’s One Year Bitcoin (BTC) Anniversary
It is worth noting that it’s almost been a year since the small Latin American country made the top crypto asset legal tender. Despite the Volcano bonds being delayed three times already, the country made significant progress in the tourism sector.
Moreover, the tough battle with the local street gangs has finally bore fruit, as people around the world, including the locals, don’t see El Salvador as the murder capital of the world anymore. Finally, volcanoes might actually help the country strive for innovation, as a geothermal power plant in El Salvador is already using an actual volcano to reduce carbon emissions.
Setbacks in Legislation While BTC Gets Slapped Around by Bears
Ardoino disclosed that Congress was supposed to pass a digital securities bill back in May, but the process is on hold. However, the government officials claim to have prepared a final draft of the bill. It is likely that the bill will be passed during this autumn session because President Bukele’s New Ideas Party has the majority of votes in the Congress.
Moreover, El Zonte Capital, Bitcoin’s (BTC) ambassadors in the region, announced the new timeframe for the release of Volcano bonds to be late 2022. The funding round of the Volcano token is supposed to be $1 billion dollars. Opinions about whether El Salvador can gather up the amount of money varies greatly. For instance, William Snead, a strategist at BBVA, doesn’t see the Bitcoin-backed Volcano bonds launching at all.
Volcano Bonds Are Not Ready for Eruption Yet
Over and beyond that, the falling price of Bitcoin (BTC) is causing turmoil among investors, as it prevents a smooth launch of the hugely anticipated token. Nayib Bukele’s crypto portfolio stands at a $58 million deficit. Moreover, the only profitable purchase at the moment is Mr. Bukele’s last investment: the 80 Bitcoins (BTC) bought for $19,000 each. It can be argued that counting losses at this point is narrow-minded if it’s seen as a long-term investment, as explained by Finance Minister Alejandro Zelaya.
In spite of that, El Salvador is in danger of defaulting on an $800 million loan as soon as January, so the remorseless bear market doesn’t help.
On the Flipside
- While El Salvador’s Nayib Bukele and his New Ideas Party have the majority in the nation’s Congress, there’s a big chance the digitization bill will be passed. On the other hand, like-minded CAR president Faustin Touadera is not as lucky. The Central African Republic’s High Court rejected the efforts of the Sango Project, claiming that e-residency and citizenship cannot be bought.
Why You Should Care
As El Salvador is the first country in the world to announce Bitcoin (BTC) as legal tender, the development of the small Latin American country is crucial for the growth of crypto.
Learn more about how declaring Bitcoin (BTC) legal tender has impacted the everyday life of El Salvador
Read about a like-minded country, the Central African Republic, and their journey towards a brighter future
Check out Nayib Bukele’s Golden Bitcoin (BTC) City model, powered by a Volcano centerpiece