Doubts about the final outcome of the war in Ukraine are currently grabbing the world's attention. And it is apparently the conclusion of the war that El Salvador is waiting for before launching the Volcano Bonds (find out how buy Bitcoins) based on bitcoins.
Bitcoin bonds worth over $ 1 billion
The launch of El Salvador's EBB1 bonds is expected to take place during the week ending yesterday, although Finance Minister Alejandro Zelaya previously said it all hinges on the war in Ukraine, as reported by Reuters.
As expected since November last year, El Salvador aims to issue bitcoin-based bonds worth over $ 1 billion. The proceeds will be used for the country to increase its bitcoin holdings, which already stand at around 1.800 BTC.
The Central American country will also use the money raised from the bond issue to finance the construction of Bitcoin City, a city that will be powered by geothermal electricity generated by the Tecapa volcano and later by the Conchagua volcano.
So far, the government has not provided details on the regulatory framework envisaged for the issuance of Bonos Bitcoin, although it is clear that everything that the Central American country had foreseen for this financial instrument has been delayed.
“These are always provisional dates, I cannot determine the market variations. I could not have known that a war would break out between Russia and Ukraine. There is an international context that we need to review to see when it is the right time to go out ”- Alejandro Zelaya, Finance Minister of El Salvador.
Zelaya added that bitcoin bonds are part of the government's efforts to diversify funding options, according to a local TV channel.
The world is in crisis and El Salvador's bitcoin bonds are lagging behind
On Thursday, President Nayib Bukele announced a series of measures to alleviate the economic crisis that was already affecting the country and which was exacerbated by the Russian invasion of Ukraine.
In a message on state radio and television, Bukele stated that "the economic crisis caused by all that remained of the COVID 19 pandemic is aggravated by the ongoing conflict between Russia, Ukraine and NATO".
The war in Ukraine is holding back global economic growth, IMF CEO Kristalina Georgieva warned Thursday, saying the scenario is one of pressure on food prices and a deterioration in consumer and business confidence.
Against this backdrop, the IMF will cut its global growth forecast due to the war, Georgieva said, adding that a Russian default is no longer "an unlikely event".
However, in this context of war, global investors are buying stakes in cryptocurrency funds and companies as they seek to expose themselves to an industry that many believe can withstand the fallout from the Russia-Ukraine conflict.
Research firm Fundstrat showed that venture capital investments are consistent with large weekly inflows. Since the beginning of the year, weekly investments in the sector have averaged between $ 800 million and about $ 2 billion, which would favor El Salvador with its bitcoin-based bond issuance.