El Salvador Bitcoin Bonds Once Again Delayed: Fortune
- Bitcoin Bond by El Salvador will reportedly face further delay, demonstrating the challenges the country is encountering with its ground-breaking initiative.
- Bitfinex CTO Paolo Ardoino predicted that the Bitcoin bond would launch in mid-September. However, with the deadline coming closer, there’s no sign of launch preparation or date.
The highly-anticipated Bitcoin Bond by El Salvador will reportedly face further delay, demonstrating the challenges the country is encountering with its ground-breaking initiative.
Hong Kong-based company iFinex Inc.’s Bitfinex CTO Paolo Ardoino said in May that the exchange was waiting for the Central American nation’s Congress to pass a digital securities bill, clearing the way for Bitfinex to become the approved technological provider. Ardoino predicted that the Bitcoin bond would launch in mid-September at the time. However, with the deadline coming closer, there’s no sign of launch preparation or date.
On Monday, during an interview with Fortune, Ardoino said that the government officials have informed him that they currently have a final draft, with passage anticipated in the coming weeks.
“If the law passes by September, I would expect it to reasonably take two to three months to have everything else rolled out,”He added.
The Volcano token, also known as the Bitcoin bond, was initially introduced by President Nayib Bukele in November last year, two months after El Salvador became Bitcoin legal tender. Investors contributed $1 billion to the project, half of which was used to purchase Bitcoin and finance infrastructure projects.
The token was supposed to launch in early 2022, but El Salvador’s finance minister delayed it until mid-March before postponing it forever when the value of Bitcoin fell. This was probably caused by a lack of investor interest, particularly since U.S. investors are not permitted to trade on Bitfinex, which is chosen as the sole exchange provider of the anticipated token.
The delay, which comes almost a year after El Salvador became the first nation to recognize Bitcoin as legal tender, has left experts wondering about whether the Bitcoin bond project will ever come to pass.
Financial Services Company BBVA’s William Snead said that El Salvador’s traditional bonds are one of the region’s glaring underperformers due to the projected Volcano token release and the government’s ability to pay its debt. Snead expressed skepticism about the launch by stating that “crypto bond issuance has a very low probability of success” due to the turbulence in the cryptocurrency market.
According to Ardoino, Bitfinex made an investment in El Zonte Capital in August and has plans to assist with more crypto education in El Salvador, where Bitcoin adoption is still weak. Unlike Snead, he believes there will be sufficient investor interest to raise the full $1 billion for the Volcano token.