The Bitcoin bonds that the president of El Salvador, Nayib Bukele, wants to use to finance his Bitcoin City megaproject are behind schedule. In a television interview, the Minister of Finance, Alejandro Zelaya, admits that the date originally planned for the end of March cannot be met. “It should be in April, May or June at the latest,” the finance minister told a local television station.
But the issue of Bitcoin bonuses is complicated: the delay is not the only inconsistency in the matter. As early as March 15, Zelaya gave the Ukraine war the reason for the bond default, which the minister said he did not expect. But one is always ready for business. Spicy detail: El Salvador was one of the 35 states that abstained from UN Resolution ES-11/1 and thus did not join the condemnation of the illegal war of aggression against Ukraine.
“We’re just waiting for the right time.” Zelaya said that only the President could decide when this would come. Meanwhile, he surprises that El Salvador probably has an excess demand of US$500 million for Bitcoin bonds, which carry an interest rate of 6.5 percent. Unconfirmed reports speak of US$1.5 billion in commitments; However, El Salvador only plans to issue USD 1 billion. So why wait with the problem? A press query remained unanswered at the time of going to press.
One can only speculate about the Greens. One problem could be the lack of legal basis. After all, the structure of the bonds differs significantly from conventional government bonds. Unlike Salvadoran government bonds, for example, the payment of the “dividend” and interest is processed through Liquid Sidechain, a second layer solution in Bitcoin from the company. block flow. Because El Salvador wants to buy BTC with half of the issued volume and distribute the profits to investors after five years as a kind of “Bitcoin dividend”.
Suddenly no more government bonds?
The procedure is also likely to be further complicated by a change in the bond structure. According to unconfirmed press reports, it will not be the Salvadoran state that will act as guarantor of the interest payments, but the La Geo geothermal plant in the Salvadoran city of Berlin. Presumably, one wants to reduce the country’s debt ratio. A corresponding request for this also went unanswered.
For investors, however, the bond is likely to lose its appeal again, as corporate bonds are significantly less safe than government bonds. Whether you can still get the full desired volume is an open question.
Salvadoran Bitcoin bonds are also a topic in the latest episode of the BTC-ECHO Recap Podcast.
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