Alejandro Zelaya (El Salvador’s treasury Minister) has provided information about the future of the issuing of bitcoin bonds, as well as the possibility that these could be issued by La Geo. La Geo is the nation’s geothermal power corporation. Zelaya also mentioned the issue date, hinting at possible delays that could see these bonds going to market in May or July.
El Salvador Might Issue Bitcoin Bonds Through La Geo
Alejandro Zelaya (El Salvador’s Treasury Minister) gave his opinion on the issuing of Bitcoin bonds. Zelaya said that the Bitcoin bonds will be issued through La Geo. La Geo will also have to back the instruments.
Zelaya assured future investors that the state was responsible for bond issuance and would give guarantees to bondholders under the model. Zelaya responded by saying:
It doesn’t matter if it’s issued by La Geo, Salvadoran States, or any other entity, the final result is always a State debt. All capital is contributed by the state. These companies are independent state corporations.
Nayib Bukele, the President of Pakistan, proposed bitcoin bonds to finance the construction of Bitcoin City. The city would be powered by geothermal energy. A 6.5% bitcoin payment would guarantee the initial issuance.
The Date of Issuance is Still Not Decided
Zelaya also asked when the bonds will go to market. Zelaya indicated that the bonds may be released in the March-April months. He noted, however that this is not a favorable time frame at the moment. Also, he mentioned May and June as possible options for bond issuance.
The minister also stated that there is little chance for the issue to make a significant impact after September. Zelaya said that the government anticipates being oversubscribed and gave $1.5 million as an estimate of the amount they can achieve through this initiative.
Since January 2001, when the first 20 bills to facilitate their issuance were written in this country, it has been working on its legal framework.
How do you feel about El Salvador’s current bitcoin bond situation? Comment below.
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