El Salvador Bitcoin bond postponed due to security concerns
The Bitcoin bond was announced in November of last year, and its launch was initially anticipated for the first quarter of 2022.
El Salvador, a country in Central America that embraced Bitcoin (BTC) as legal cash in September of last year, has once again postponed the debut of its billion-dollar Bitcoin bond.
The Bitcoin bond, also known as the Volcanic bond or Volcanic token, was introduced for the first time in November 2021 as a method to issue tokenized bonds and raise $1 billion from investors. The funds will subsequently be utilized to construct Bitcoin City and purchase further BTC.
The issuance of the bond was originally scheduled for the first quarter of 2022 but was delayed until September due to weak market circumstances and geopolitical issues. However, Bitfinex and Tether’s chief technical officer Paolo Ardoino said earlier this week that the Bitcoin bond would be postponed until the end of the year.
In an exclusive interview with Cointelegraph, Ardoino indicated that the present delay in the launch might be linked to the nation’s security services having to face the plague of gang violence. This has diverted government resources, and “the delay in launching the Volcano Token must be considered in this perspective.”
Bitfinex is the government of El Salvador’s primary infrastructure partner responsible for processing transactions related to the sale of Volcanic tokens. Bitfinex must first get a license of issue from the government, which would be given after the September passage of the digital securities law.
Ardoino said that the final text of the law is complete, and they anticipate passage within the next two weeks, given that President Nayib Bukele’s party enjoys a majority in the legislature. He said:
We are optimistic that Congress will approve the bill in the next weeks, providing that the nation is stable enough for such legislation to pass.
Bitfinex Securities El Salvador, S.A. de C.V. “will seek for a license to operate within the digital securities regulatory framework of El Salvador once this is enacted,” he said.
While several studies and industry analysts have blamed dwindling investor interest and the current dip in the cryptocurrency market, Ardoino thinks that the concept behind the Bitcoin bond will attract investor interest regardless of market circumstances.