El Salvador Delays The Launch Of The Planned $1 Billion Bitcoin Bond

According to Finance Minister Alejandro Zelaya, El Salvador has postponed its planned $1 billion Bitcoin (BTC) bond offering due to unfavorable market conditions.

The initial launch had been scheduled between March 15-20 but the Russia-Ukraine geopolitical conflict and its impact on the price of bitcoin caused the government to push back the date, according to Reuters report.

Zelaya commented:

“I think this is not the time. There are some moves on the planet. In May and June sometimes you can, but the market variables get different. After September, it is difficult to raise, unless you are previously funded, as in the case of bitcoin bond.”

According to the Finance Minister, the Bitcoin bond will have a “substantial oversubscription” that could reach as high as $1.5 billion.

In November last year, the Salvadoran President Nayib Bukele announced plans to build a “Bitcoin City” funded by the sale of the Bitcoin bond, which have an annual coupon of 6.5%. Half the funds will be used to accumulate Bitcoin (BTC), while the rest is earmarked for infrastructure and bitcoin mining powered by geothermal energy.

The bond will be issued not by the government but instead by the state-owned thermal energy company La Geo, Zelaya said, and it will have a sovereign guarantee provided by the Salvadoran state.