According to the CTO of Tether, El Salvador’s $1 billion Bitcoin bond which has once more been postponed is due to concerns where the nation’s security forces have had to confront the scourge of violence in the country.
El Salvador, a country in Central America that recognized Bitcoin (BTC) as legal cash in September of last year, has once more postponed the issuance of its $1 billion Bitcoin bond.
The inaugural announcement of the Bitcoin bond, often referred to as the “Volcanic bond” or Volcanic token, was made in November 2021 as a mechanism to issue tokenized bonds and raise $1 billion in return from investors. The money raised will then go toward creating a “Bitcoin City” and purchasing further BTC.
The bond was originally scheduled to be released in the first quarter of 2022, but due to weak market circumstances and global crises, the date was moved to September.
The Bitcoin bond will now launch by the end of the year, according to the chief technology officer of Bitfinex and Tether Paolo Ardoino, who made the announcement earlier this week.
In an exclusive interview, Ardoino disclosed that the current launch delay could be attributable to internal security concerns as the country’s security forces have been forced to deal with the plague of gang violence. The government’s resources have been redirected as a result, and this must be taken into consideration when looking at the Volcano Token launch delay.
The El Salvadorian government’s primary infrastructure partner, Bitfinex, is in charge of handling transactions resulting from the sale of Volcanic tokens. But before the government will award Bitfinex a license to issue securities, the digital securities bill, which is scheduled to be passed in September, must first be approved.
The final draft of the bill is ready, according to Ardoino, and considering that President Nayib Bukele’s party has a majority, they anticipate it to be passed in the coming weeks. He stated:
We are confident that the law will obtain approval from Congress in the coming weeks, assuming that the country has the necessary stability for such legislation to pass.”
Upon passage of this legislation into law, Bitfinex Securities El Salvador, S.A. de C.V. “will apply for a license to operate under the El Salvador digital securities regulatory framework,” he continued.
While a number of papers and industry analysts have laid the blame for the present slump in the cryptocurrency market and dwindling investor interest in these factors, Ardoino is confident that investors would be interested in the Bitcoin bond concept regardless of the state of the market.
The Bitcoin bond, he continued, may hasten the acceptance of BTC. He clarified using meme coins as an illustration:
“When you consider that the meme coin, Dogecoin, was able to obtain a market capitalization of US$48 billion, there is clearly enough investor appetite in the digital token economy to support a $1 billion Volcano.”
On September 7, 2021, El Salvador declared BTC to be legal tender and subsequently accumulated approximately 2,301 BTC worth roughly $103.9 million.
The investment’s profits were even utilized to finance the construction of hospitals and schools during the bull market, but due to the recent market drop, that BTC stake is now only worth roughly $45 million.