El Salvador may launch its sovereign bitcoin (BTC) bonds as early as tomorrow – but the war in Ukraine may cause disruption to the plans of the President Nayib Bukele-led government.
The 10-year bonds, the government said it hopes, will be worth some USD 1bn, will be backed by taxpayer funds, and will provide a 6.5% annual return when they expire.
The cash raised in their sale will be used to fund the creation of a project called Bitcoin City – a tax-free haven aimed at international crypto investors and tech pioneers.
However, it appears that the government fears that the war risks overshadowing the bond release – particularly in the international community, where Bukele is hoping the bonds make a major splash.
But the invasion has already sparked a major economic crunch in El Salvador, with sanctions sending fuel prices spiraling upwards. The government has spent the last few weeks attempting to battle major spikes in the prices of oil, LPG, and gas.
On Friday, the Salvadoran finance minister Alejandro Zelaya was quoted by América Economía as stating that the government thought that “between March 15 and 20” would be the “right timing,” for the launch as “the tools” for the issuance were “almost ready.”
However, he added that “the international context” would dictate the exact date of the launch as he “hadn’t expected the war in Ukraine.”
Reuters reported that the bond issuance “has faced headwinds as intensifying volatility rocks the cryptocurrency, with Russia’s invasion of Ukraine adding to the uncertainty.”
Zelaya claimed that the issuance was now “a matter of timing, of seeing and measuring market trends [...] basically going from there.” He added:
“There are many things in the international context that we have to
Read more on cryptonews.com