El Salvador Bitcoin Bonds to be Launched Next Month

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Key facts:

Bitcoin Bonds do not imply that El Salvador rejects the traditional financial system.

Economist calls Bitcoin Bonds “a desperate measure” but one that could be successful.

The bonds backed in bitcoin (BTC) that the Government of El Salvador will launch will be available in February and March 2022. This was confirmed yesterday, January 4, by the Minister of Finance, Alejandro Zelaya.

The Salvadoran official hopes that the strategy will be successful. Recall that, as reported by CriptoNoticias in November, The Central American country seeks to raise USD 1 billion through these bonds. The money will be used both to build the Bitcoin City and to acquire more BTC (to date, the nation has 1,391 bitcoins according to publicly available information).

«Let’s see how the issuance of Bitcoin Bonds comes out [Bonos Bitcoin] to then draw up the whole strategy, “explained Zelaya.

In dialogue with the . Agency, Ricardo Castaneda, an economist at the Central American Institute for Fiscal Studies, spoke on the matter. According to this professional, Bitcoin Bonds are “a desperate measure.”

In any case, Castaneda does not deny that the measure may be successful and bases: “If this works out well, President Bukele will be an example and will be able to say to multilateral organizations and the international community,” We do not need them. But if this goes wrong, the one who is going to lose is the entire population. “

Zelaya says he does not agree with those kinds of opinions. For him, the launch of these bonds does not imply that El Salvador leaves the traditional financial market:

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“El Salvador is now competing to be a regional debt market, so we would not be abandoning the traditional bond issuance market. We could go to New York, we could make a bitcoin bond [bono bitcoin]We could deal with a multilateral body, or we could hire a private investment bank. ‘

Alejandro Zelaya, Minister of Finance of El Salvador.

In addition, the representative of the Government denies that the launch of these financial products harms the relationship with international organizations, more precisely with the International Monetary Fund (IMF). He adds that the dialogue continues and that “the negotiations with the IMF have only stopped in the minds of analysts who are adverse to the Government.”

Laws are being prepared in El Salvador to receive Bitcoin Bonds

The announcement of the launch of the bonds is given for February or March, but some final adjustments still need to be made to be able to issue them. As CriptoNoticias reported yesterday, the Government sent a score of bills to the Legislative Assembly to provide a strong legal basis for Bitcoin Bonds.

These financial instruments, which will give an annual return of 6.5% (paid in dollars) will be broadcast digitally on Liquid, a Bitcoin sidechain developed by the Blockstream company.

In November, Samson Mow, a director of this company, exclusively told this information portal that El Salvador would issue other bonds with similar characteristics in the future.

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