El Salvador Bitcoin Bond Is Coming, Market Sentiment 'Mixed'
This article comes fromBeInCrypto, original author: David Thomas
Odaily Translator | Nian Yin Si Tang
Odaily Translator | Nian Yin Si Tang
In El Salvador, the forthcoming issuance of a bitcoin bond relies heavily on retail investors, but institutional skepticism threatens the project’s success.
According to Reutersto reportto report
El Salvador’s Finance Minister Alejandro Zelaya said on Friday that the country is looking for the right time to issue a bitcoin bond, possibly between March 15 and 20, depending on the state of the war in Ukraine. "We're still finalizing some details, almost everything is ready, it's just a matter of time," Zelaya said.
In fact, President Nayib Bukele does rely on the success of this initiative to individuals like Pais as well as retail investors around the world.He wants to raise $1 billion for El Salvador to buy more bitcoin and fund apowered by geothermal energy
"Bitcoin City", the excess funds will be used to pay off debts.Since last year, the Central American country's sovereign bondsalways in junk
“If it fails this time, a lot of doors will be closed,” said Carlos Acevedo, a former central bank executive, even as institutional investors watched the bond from afar.
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El Salvador's Bitcoin bet has 'mixed results'
Bukele's bet on bitcoin largely failed to pay off, as only 2% of remittances came from digital wallets in January, even though the government had earlier cited expensive overseas remittances in fiat currency as a reason for seeking bitcoin as legal tender .
A bank executive said 0.01% of debt was paid in bitcoin, excluding remittances, while a rival said it processed an "irrelevant" number of transactions. However, the government insists that 20% of transactions in the tourism industry will involve bitcoin in November and December 2021.
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Skeptics see opacity as a problem
Some people were offended by Bukele's secrecy about buying bitcoin for El Salvador. “The clearest government policy in El Salvador right now is to use public money opaquely,” said Ruth Lopez, a senior official at the anticorruption nonprofit Cristosal.
The bonds, which will be issued by thermal energy company La Geo, will not be allowed to buy through Bitfinex because they are barred from using the company's services, bankers and investors said. And Salvadorans will be allowed to buy bonds through Bitfinex.
Analysts see limited gains from the bond, as the yield on sovereign bonds is higher than the 6.5% coupon rate on bitcoin bonds.
