The El Salvadorian government has reportedly decided to postpone the issuance of Bitcoin (BTC)-backed bonds due to unfavorable market conditions caused by the geopolitical crisis.

Finance Minister Alejandro Celaya said in an interview with a local television station that the Volcanic Bond film will not start in El Salvador in March, as previously expected by the El Salvadoran government.

Zelaya stated that the delay was caused by Bitcoin price volatility caused by the crisis in Russia and Ukraine. He added that the Salvadoran government decided to wait for favorable conditions in the financial market and waited until September at the latest, and stated:

“Now is not the time to issue bonds […] In May or June the market variables are a bit different. By September at the latest. After September, if you enter the international market, it is difficult to raise capital.”
Bitcoin is trading at $42,236 at the time of writing, up about 10% from the last 30 days, according to data from CoinGecko. The cryptocurrency has lost almost 50% of its value since the Salvadoran government initially announced plans to issue its Bitcoin bonds in November.

Bitcoin price on 180-day chart. Source: CoinGecko
Last week, Zelaya hinted at a possible delay in the issuance of El Salvador’s Bitcoin bonds, citing the unstable political situation in the world as one of the main reasons for the delay.

As previously reported, the $1 billion Bitcoin bond issue was originally scheduled for mid-March. El Salvador Congressman William Soriano tweeted in early February that Bitcoin bonds were expected to launch in the second or third week of March.

El Salvador’s President Nayib Bukele initially announced plans for a bond issue in November 2021. It is said that the bond will sell with a coupon of 6.5% and a bitcoin gain of 50% on the increase in the price of the cryptocurrency in five years. Half of the expected $1 billion in revenue from the issuance was earmarked for the construction of “Bitcoin City,” a development designed to mine bitcoins using geothermal energy using nearby volcanoes. The remaining $500 million will be invested directly in bitcoin.

Related Topics: 14% of Salvadoran Companies Trade BTC: Chamber of Commerce

El Salvador’s delay in issuing bitcoin bonds comes as the government is also apparently slowing down the pace of new bitcoin purchases. Subsequent Bitcoin purchases were previously reported at least once a month, and the El Salvadorian government has not announced new purchases since January 2022.

Source: CoinTelegraph