El Salvador may delay its Bitcoin (BTC) bond issuance until September, the country’s finance minister has admitted. Alejandro Zelayaalthough an earlier issue date is still possible.
The government hopes to raise $1.5 billion in an issuance to fund the construction of a tax haven for international bitcoin enthusiasts. The bonds were originally due to be launched last week, but the government backtracked, saying the war in Ukraine had been an “unexpected” factor.
Zelaya, according to ElSalvador.com, told a reporter:
“We are ready to implement the issuance process. We are waiting for the right moment and for the president [Nayib Bukele] gives us the green light. I think the time is not right yet, we have to wait a few more days.”
But when asked to clarify his remarks, Zelaya replied:
“For me, the ideal time to get into the market is the first financial quarter, between March and April. No later than September. In May or June, the market variants are a little different. The later would be September.After September,if you go to international market,it is difficult [de lever des capitaux].”
But the finance chief insisted there was still no lack of interest in bonds, saying:
“There are already interested buyers, we are sure that we will exceed our initial forecast. I hope that this issue will reach 1.5 billion dollars. We will probably reach 1 billion [USD]but I think we’re going to have a pretty significant oversubscription that we can channel into other funding needs in the country.”
Mr. Zelaya also confirmed that the bond issue would be through a public company called LaGeo.
However, the outlet noted that a recent blog post by the British economist Frank Muci had raised serious doubts about LaGeo’s ability to handle such an operation.
Muci, project manager at the Growth Lab Research Collaboration of the London School of Economicswrote :
“The company simply doesn’t have the size or the cash to pay the interest, let alone the principal ten years from now.”
The economist concludes:
“We’re supposed to be excited as a small public company no one’s ever heard of will sell the bonds instead of the government, as expected. And we’re supposed to believe it’s a better choice than the traditional financial system. It’s a joke”.
Meanwhile, the same outlet also reported that Bukele had canceled a planned visit to San Pedro Sula in Honduras, after rumors swirled earlier this week claiming the nation’s president was set to adopt the Bitcoin as legal tender.
The municipal councilor Silvia Sosaa member of the office of the mayor of Tegucigalpa, had announced on social media that Bukele would be visiting this month and that the mayor Jorge Aldana would honor Bukele’s visit by handing him the keys to the city. No official reason was given for the cancellation, although the outlet pointed out that the event was not officially scheduled in the Salvadoran presidential calendar.
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