El Salvador Bitcoin Bonds Could Face Further Delay Due to Security Concerns

It’s been almost a year since the Latin American country of El Salvador made Bitcoin a legal tender, the first-of-its-kind move by any country in the world. The country was also planning to float Volcano Bitcoin Bonds back in November 2021, and had also raised $1 billion for the same.

As per El Salvador, the fundraiser shall be used to build a “Bitcoin City” and buy more BTC. However, El Salvador has been facing repeated delays in the launch of its Bitcoin Bonds.

As per the previous schedule, the Bitcoin Bond was to be issued by the first quarter of 2022. However, citing unfavorable market conditions and geopolitical crisis, the Latin American country decided to postpone it to September this year.

But earlier this year, Bitfinex and Tether chief technology officer Paolo Ardoino said that the Bitcoin bond could be delayed till the end of the year. Note that Bitfinex is the key infrastructure partner of the El Salvador government and is responsible for processing transactions from the sale of Volcanic tokens.

But to proceed ahead with the plan, Bitfinex first needs to secure a license of issuance from the government. But this license would only be granted after the passing of the digital securities bill which is slated for release this month.

As per Tether CTO Paolo Ardoino, the final draft is almost ready and he is expecting it to be passed in the next couple of weeks. “We are confident that the law will obtain approval from Congress in the coming weeks, assuming that the country has the necessary stability for such legislation to pass. Bitfinex Securities El Salvador will apply for a license to operate under the El Salvador digital securities regulatory framework once this is passed into law,” he said.

Interestingly, the Tether CTO attributes the delay in the launch to internal security issues wherein the nation’s security forces has been recently confronting with gang violence in the country. This has completely diverted the focus of government securities and "The delay in the launch of the Volcano Token has to be viewed in this context,”.

However, the crypto market has come under intense selling pressure recently once again after the Fed chairman talked about the possibility of aggressive rate hikes coming soon.

But Ardoino is confident that El Salvador’s Bitcoin bonds would garner investors’ attention irrespective of the market conditions. The Tether CTO believes that Bitcoin Bonds have the potential to accelerate BTC adoption.

In an interesting analogy with memecoin, Ardoino said: “When you consider that the meme coin, Dogecoin, was able to obtain a market capitalization of US$48 billion, there is clearly enough investor appetite in the digital token economy to support a $1 billion Volcano”.