El Salvador insists bitcoin bond is coming despite delay

24 Mar 22

The president of El Salvador has insisted his government will issue a planned bitcoin-backed bond, initially set for last week, after a “short delay”.

Nayib Bukele, whose decision to adopt the cryptocurrency as legal tender last year drew concern and criticism from global financial institutions, said other government business has taken precedence.

He said on Twitter that a Reuters report which said the launch was delayed because of the war in Ukraine and volatility in bitcoin’s value, was “FUD” – a cryptocurrency slang meaning ‘fear, uncertainty and doubt’.

“Please don’t spread Reuters FUD,” he said.

“The bitcoin Volcano Bonds [named after the Conchagua volcano, the power source of the bitcoin mining operation] will be issued with [cryptocurrency exchange] Bitfinex.

“The short delay in the issuance is only because we are prioritising internal pension reform and we have to send that to congress before.”

In a television appearance on Tuesday finance minister Alejandro Zelaya said the bond, through which he hopes to raise $1bn, will be issued at some point in March or April.

Bukele plans to build a ‘bitcoin city’ with the funds raised by the sale of the bonds, with large bitcoin mining capability powered by geothermal energy.

On Wednesday a bill was progressed through a US Senate committee that would, if passed, require officials to draw up a report into El Salvador’s adoption of bitcoin, last year.

It would include assessments of the regulatory framework in El Salvador, the government’s capacity to mitigate “financial integrity and cyber security risks”, the impact on individuals and businesses and the impact the decision has on the economy and public finances.

The report would also consider what effect the decision has had on the rule of law and democratic governance, the unbanked population, the flow of remittances to El Salvador and whether the move has damaged the government’s relationship with the International Monetary Fund and World Bank.

“Never in my wildest dreams would I have thought that the US government would be afraid of what we are doing here,” Bukele said on Twitter in reaction to the news.

Did you enjoy this article?

Related articles

Have your say


CIPFA latest

Most popular

Most commented

Events & webinars