BitcoinPoliticsMarkets

El Salvador Ready to Launch First Bitcoin Bonds

727461

The country of El Salvador planned to launch Bitcoin backed bonds in just six months after making Bitcoin legal tender. The tentative timing for the launch of the bond was between March 15th and 20th, but according to the financial minister Alejandro Zelaya the launch may be delayed due to the conflict in the Ukraine. 

El Salvador currently has half a billion dollars and is planning to raise $1 billion by issuing Bitcoin volcano bonds. The government plans to use the money raised by the Bitcoin volcano bonds to pay off and restructure its debt, buy Bitcoin to add it to the country’s treasury, and fund ‘Bitcoin City’ near the Conchagua volcano in the La Unión region in the country’s southeast. The Bitcoin volcano bonds will be set up to offer 6.5% annual interest for a ten year period and distribute 50% of Bitcoin’s price gains after a period of five years. These bonds will also be issued as a tokenized security on Blockstream’s Liquid network and will serve as an investment in the Bitcoin network as well as the El Salvadoran government. 

Although Bitcoin becoming legal tender in El Salvador has seemingly been successful, the IMF has not been fond of this decision. The IMF has refused a $1.3 billion loan over the issue and both Moody’s and Fitch Ratings of El Salvador have slashed the country’s bond rating. 


 

author avatar image

written by

Brandon is a data analyst who enjoys writing about bitcoin and finance. He is the co-founder of Green Candle Investments, a bitcoin and finance media company.

Top stories

Stay up to date with our latest news.