Bitcoin Bonds El Salvador not yet ready for launch

Alejandro Zelaya, the finance minister of El Salvador, commented on Bitcoin Bonds in an interview on 1 June. According to Zelaya, the time is not yet ripe to launch the round of bonds that El Salvador wants to raise $1 billion with. Among the reasons Zelaya cites for this are the weakness and volatility in the market and the ongoing conflict between Russia and Ukraine.

Bitcoin is the future we are betting on

The bond round is hugely important for El Salvador, as the country could go bankrupt in January 2023 due to an $800 million bond default. This prompted credit rating agency Moody’s to lower El Salvador’s credit score on 4 May. The main reason for this is a lack of feasible plans for taking credit out of the market.

El Salvador will further delay launching its anticipated billion-dollar Bitcoin bond.

Finance Minister Alejandro Zelaya cited price volatility and uncertain market conditions resulting from the ongoing Russia-Ukrainian war as reasons for the wait. https://t.co/WXd3e0IrTn

— Cointelegraph (@Cointelegraph) June 3, 2022

In November 2021, El Salvador’s President Nayib Bukele came up with a plan to raise USD 1 billion through a bitcoin bond round. Originally, that bond round was to start in March 2022, but everything has already been postponed to the period from June to September this year. It is now June and the situation does not seem to be any better.

“No, the situation is still the same. The bitcoin price continues to struggle with the conflict in Ukraine. In the short term there is a lot of volatility in the price, but in the long term bitcoin has always done well so far. There is a future and there is economic innovation and we are betting on that,” Zelaya said in the interview.

Human rights violations in El Salvador

In addition to the problems on the financial front, things are also not going well on the criminal front in El Salvador. Because of the rising murder rate, for which the government points to the gangs and organised crime, Bukele proclaimed a State of Emergency on 27 March.

This State of Emergency makes it possible to change the law in the short term in such a way that far-reaching decisions can be taken. So far, this has resulted in the arrest of 35,000 people in three months.

This means that 1.7% of the adult population is in prison, which is now running at 250% of capacity. According to Amnesty International, human rights are being violated, among other things as a result.