The world’s first country to accept bitcoin as its legal currency, El Salvador, is still struggling to issue the much-awaited Bitcoin bonds because of heavy market downfall, according to the Finance Minister of the nation.
During an interview, Finance Minister Alejandro Zelaya said that it was not yet time to bring the Bitcoin bonds, so-called Vulcano Bonds, due to the “troubled” price of the biggest cryptocurrency.
This is not the first time that the Government is delaying the launch date of the bonds. In March, as TheCoinRise reported, the $1 billion BTC bond was postponed mainly due to volatility in the global financial conditions.
At the time, Zelaya noted that the serious dispute between Ukraine and Russia could work as a catalyst for slowing down the roll-out process.
This time, the minister said that it was not the time and did not mention any tentative date of issuance.
Bitcoin Bonds come with risks
Although the Government has not set a precise date for the introduction of the Bitcoin bonds, despite investor and crypto enthusiast pressure, it cannot take the launch of the bonds lightly because they would indebt the country.
The Government would be smart to wait for the Bitcoin (BTC) value to gain back, as it is not the same to back $1 billion in debt with a BTC at 60,000 than it is to do so with BTC trading at $30,000 per token. This is because it would have to pay almost two times when the bonds mature as investors are not buying BTC but obligations paid in fiat.
El Salvador must pay $800 million in debt in January, according to Ricardo Castaneda, an economist at the Central American Institute for Fiscal Studies (ICEFI). “[However] right now, the country is not guaranteed to get that money,” he said. As a result, Bukele needs to raise as much money as possible through these Bitcoin bonds while staying out of severe debt.