Friday, June 2, 2023

El Salvador’s Bitcoin Bond


El Salvador’s Bitcoin Bonds are expected to be released this week. This week, Bitcoin bonds will be available for buy.

El Salvador’s President, Nayib Bukele, describes the Bitcoin bonds as a “gateway” to help the country get out of debt. These bonds are available for purchase by both retail and institutional investors from around the world.

President Nayib Bukele has stated that he intends to raise at least $1 billion from the Bitcoin bonds to help the country pay off its increasing debt.

However, there is still a lot on the line because there aren’t enough institutional players from other markets interested in it. Several institutional players have stated that they will be keeping a close eye on the bonds. Also, the buyers are more likely to be individual investors.

About the Bitcoin Bond

President Nayib Bukele has experimented with a 10-year Bitcoin “volcano bond”. As previously stated, the $1 billion raised from the sale of these bonds would be used to fund the new “Bitcoin city.” This will be fueled by a volcano near the Honduran border’s geothermal energy.

The money will also purchase Bitcoin (BTC) and add it to the country’s reserves. According to experts, the increased monies will aid the country’s sovereign debt restructuring. However, six months after making Bitcoin legal tender, the corporation is still struggling to promote its use.

Previously, the government of El Salvador said that Bitcoin would be a handy way for the country’s massive migrant work force to send money home. However, according to central bank figures, Bitcoin digital wallets accounted for barely 2% of remittances in January.

A senior bank executive also stated that Bitcoin was used for less than 0.01 percent of debt payments (BTC). The quantity of Bitcoin transactions, according to another, is “irrelevant.”

El Salvadorians’ Opinion on Bitcoin Risks

According to a poll performed by a Central American university in December, 70% of El Salvadorians have little faith in Bitcoin. It, they say, mostly helps foreigners.

Alejandro Jiménez, a 23-year-old call center employee in El Salvador, said he’s not sure how to use it. It frightened him because it fluctuates so much; it’s quite volatile. Their administration is taking a big risk.

However, not everyone is afraid. Josué Pas, the owner of a cab company in El Salvador, has been a vocal supporter of his president’s idea. Pas, 36, has already begun collecting Bitcoin payments from tourists and has announced that he will invest $200 in Bitcoin bonds.

Will there be enough participation to compel institutions to play this game? If this fails, a lot of doors close, according to Carlos Acevedo, a former president of El Salvador’s central bank. This announcement will have a significant impact.

Bukele also has to be more transparent about how he buys Bitcoin. He must also demonstrate his economic strategy for getting the country out of debt. His sovereign bond has downgraded to junk status after it made Bitcoin legal tender last September.

El Salvador’s Bitcoin status has also revoked, according to the IMF.

Rainy Naidoo
Rainy Naidoo
Rainy Naidoo is a writer for Cryptoconstellation. She has her Degree in Journalism and communications. Rainy Likes to spend her free time reading and exploring new places.

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