- El Salvador’s Bitcoin bond has been delayed owing to market conditions
- Russia’s invasion of Ukraine has destabilized world markets
- El Salvador will try again later this year and hopes to raise over $1 billion
El Salvador has decided to delay its $1 billion Bitcoin bond until later in the year over fears of global market instability. Russia’s invasion of Ukraine has seen equity and commodities markets into turmoil, and the El Salvador government quite rightly thinks this isn’t a great time to be launching a Bitcoin bond. The bond may launch later in the year, but this is assuming that the world won’t still be in a complete mess by then.
Bitcoin Bond Will Replace IMF Loan
El Salvador’s Bitcoin bond has grabbed headlines since it was first mooted at the start of the year, with the raise being used as an alternative to the International Monetary Fund loan that El Salvador was denied last year after its adoption of Bitcoin.
Argentina recently secured a $45 billion IMF loan which included a clause that stipulated the country would not encourage the use of cryptocurrencies in the country.
September or Bust for El Salvador
Interest in the Bitcoin bond had seen the kitty hit $1.5 billion with the launch supposed to take place last week. But the short delay has turned into a much larger one, with Finance Minister Alejandro Zelaya telling an El Salvadoran TV interviewer that conditions may be better later in the year:
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).
There have been several dissenting voices over El Salvador’s Bitcoin bond, including Carlos Acevedo, a former president of El Salvador’s central bank, who warned that if the bond was a failure “a lot of doors close” and that “This issuance is going to define a lot.”