Salvadoran leaders still don’t think the time is right to launch their much-anticipated bitcoin bond, Finance Minister Alejandro Zelaya said on a national newscast on June 1, citing post-Russian war market conditions. and Ukraine.
Initially, the $1 billion bond was to be launched between March 15 and March 20. But on March 22, Zelaya explained that the country was still waiting for the right time to launch them due to conditions such as war. At the time, the government had yet to finalize legislation around a regulatory framework for digital assets.
Meanwhile, economists have expressed concerns about the country’s ability to raise funds to cover its looming financial obligations, including an $800 million bond that will mature in January. “And right now the country is not guaranteed to get that money,” Ricardo Castaneda, an economist at the Central American Institute for Fiscal Studies (ICEFI), told The Block in a recent voice note. In total, he estimates the country needs to come up with about $3 billion also taking into account the gap between income and expenditure through 2024.
Zelaya also said during the interview that talks between El Salvador and the International Monetary Fund (IMF) are ongoing and there will be an update in the coming weeks.
Analysts have raised questions about El Salvador’s strategy to continue buying bitcoin given the currency’s recent price declines, estimating that the country has lost more than $35 million on its investments based on the prices. current and value of bitcoin at the time of purchase. El Salvador bought a new set of 500 bitcoins on May 9 during a price drop, bringing its total government purchases to 2,301 bitcoins.
The mechanics of bitcoin transactions from El Salvador are not entirely clear. When asked if the country had sold bitcoin, Zelaya said that “some” of the country’s bitcoin had been sold to fund the Chivo Pets pet hospital. Bukele said the project was funded with a “surplus” of $4 million based on bitcoin price fluctuations. Zelaya mentioned the role of the country’s bitcoin trust fund, which allows the country to hold both the US dollar and bitcoin.
Zelaya then argued that the country was keeping its bitcoin. “We are not selling the parts we have purchased at this time,” he said.
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