The Central American nation of El Salvador, which adopted Bitcoin (BTC) as legal tender in September last year, has again delayed the launch of its $1 billion Bitcoin bond.
The Bitcoin bond, also known as the volcano bond, or volcanic token, was first announced in November 2021 as a way to issue tokenized bonds and raise $1 billion in return from investors. The proceeds will then be used to build your Bitcoin City project and buy more BTC.
The bond issue was scheduled for the first quarter of 2022, but was postponed to September due to unfavorable market conditions and geopolitical crises. However, earlier this week, Bitfinex and Tether CTO Paolo Ardoino revealed that the Bitcoin bond will be delayed again until the end of the year.
Ardoino, in an exclusive conversation with Cointelegraph, revealed that the current launch delay could be attributed to internal security issues where the nation’s security forces have had to deal with the scourge of gang violence in the country. . This has diverted the focus of government resources, and “the delay in the launch of the Volcano Token has to be seen in this context.”
Bitfinex is the key infrastructure partner of the government of El Salvador responsible for processing the volcano token sale transactions. However, Bitfinex must first acquire an issuance license from the government, which would be granted following the passage of the digital securities bill expected in September.
Ardoino confirmed that the final draft of the bill is ready, and that they expect it to be approved in the next two weeks, given that the President’s party, Nayib Bukele, has a majority. He said:
“We trust that the law will obtain the approval of Congress in the coming weeks, assuming that the country has the necessary stability for said legislation to be approved.”
Bitfinex Securities El Salvador, SA de CV “will apply for a license to operate under El Salvador’s digital securities regulatory framework once it is passed into law,” he added.
While various reports and market pundits have blamed declining investor interest and the ongoing crypto market slump, Ardoino believes that the idea behind the Bitcoin bond could spark investor interest regardless of market conditions.
He added that the Bitcoin bonus has the potential to accelerate the adoption of BTC. He cited the example of memecoins and explained:
“If we consider that the memecoin, Dogecoin, was able to gain a market cap of $48 billion, it is clear that there is enough investor appetite in the digital token economy to support a $1 billion Volcano.”
After converting BTC into a legal tender on September 7, 2021, El Salvador accumulated more than 2,301 BTC for about USD 103.9 million. During the bull market, the investment profit was even used to build schools and hospitals, however, with the current market downturn, BTC holdings are currently worth about $45 million.
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