November 2021, El Salvador made an announcement that it was planning to issue Bitcoin bonds worth $1 billion.
Sources citing Alejandro Zelaya( El Salvador’s finance minister) tell Financial Times that the total value of the bids for the Bitcoin bonds has currently reached $1.5 billion.
“Much to our surprise, [Zelaya] said he had demand for up to $1.5 billion for the Bitcoin bonds.”
Following its announcement to issue Bitcoin bonds last November, El Salvador also indicated that $0.5 billion of the profits from Bitcoin bonds would be used to purchase Bitcoin. The other $0.5 billion would be used to develop a bitcoin city, where miners could utilize geothermal energy sources for their Bitcoin mining activities.
Issued at an annual coupon rate of 6.5%, the Bitcoin bonds are expected to pay a dividend of 50% of the gain in the cryptocurrency price after 5 years.
However, El Salvador may have to postpone its plan to issue Bitcoin-backed bond, after the war between Ukraine and Russia broke out a few weeks ago.
“We believe that between March 15th and 20th is the right timing, we have the tools almost finished. But the international context will tell us… I didn’t expect the war in Ukraine.”, Zelaya said.
Moreover, a series of legal reforms would have to be approved before this country could officially issue the bonds, according to Nayib Bukele, El Salvador’s President.
El Salvador’s BTC bonds are expected to trade on Bitfinex.
