Reasons Why El Salvador Can’t Issue Bitcoin Bonds

Reasons Why El Salvador Can't Issue Bitcoin Bonds

Since El Salvador’s president recognized Bitcoin as legal cash earlier this year, the country has started working on Bitcoin bonds. President Nayib Bukele’s decision has been met with great skepticism from numerous sides.

The Central American country has released various initiatives in the direction of accomplishing its goals of utilizing digital assets for the transaction.

Bitcoin Bond is one of the crypto projects the country hopes to implement. But the debut was delayed several times as the government dealt with problems. More waiting may be in store as the country searches for new obstacles to overcome.

At the same time, in March 2022, when the cryptocurrency market crashed, El Salvador put off its launch. The country has not announced a firm date for the introduction of its Bitcoin bond, despite several delays.

Some experts in the field have expressed doubt that the Bitcoin bond will ever be implemented in the country, and others have said that investors aren’t interested enough.

There Could Be a Bitcoin Bond Draft in the Works

Bitifinex, El Salvador’s only exchange operator, has said in a statement that the country’s Bitcoin bond project is on hold pending the approval of the digital asset statute. Once the law is passed, the firm will be able to provide its services as the Bitcoin bond’s official custodian.

A recent statement, however, indicated that the company had learned from government officials that the final bond draft had been sent to the market. Furthermore, the nation anticipates passing the bill within the next two weeks. The government has not yet provided a concrete timetable for the transition.

Bifinex’s Chief Technology Officer (CTO) Paolo Ardoino estimated that two to three months would be needed to smooth out the kinks if the bill were to pass in September.

Meanwhile, another delay until next year is possible if El Salvador fails to pass the draft bill in September.

William Snead, a digital asset strategist based in Latin America, has come forth to say that El Salvador has a poor credit standing. It’s quite improbable that a crypto bond will be issued and made available to the public.

A Step Towards Crypto Bonds in El Salvador

The government, despite the country’s sluggish economy, has high hopes that the introduction of cryptocurrencies will help alleviate the country’s financial difficulties. Since last year, El Salvador has considered issuing Bitcoin bonds, but the proposal has been put on hold multiple times.

But beginning in 2022, the country will put a sizable portion of its reserves into digital currencies. Despite a huge loss on its initial investments, the country is moving forward with plans to issue a Bitcoin bond.

Nayib Bukele, the country’s crypto bull leader, is responsible for the recent push to make Bitcoin the de facto currency. In a positive way, it has widened availability of banking services.

The country’s finance minister, Alejandro Zelaya, said that the country has seen an increase in both access to financial services and tourism. And despite earlier losses, the government is optimistic about the future of its investment in digital assets.

Orizu Augustine
Orizu Augustine is an experienced crypto writer working for Alltechcraft. Having passion for writing, he covers news articles from blockchain to cryptocurrency and iPhone and Samsung related articles.