Technology

El Salvador’s Bitcoin Bonds Depend on Outcome of Ukraine War

Doubts about the final outcome of the war in Ukraine capture the attention of the entire world at this time. And apparently it would be the conclusion of the war that is expected in El Salvador to launch the Bitcoin-based Volcano Bonds (BTC).

The launch of El Salvador’s EBB1 bonds would take place during the week that ended yesterday, although the finance minister, Alejandro Zelaya, had previously indicated that it all depends on the war in Ukraineas reported by Reuters.

As planned since November of last year, El Salvador aims to issue bitcoin-based bonds for an amount greater than USD 1,000 million. The proceeds will be used for the country to increase its bitcoin holdings, which are already in the order of 1,800 BTC.

The Central American country will also use the money raised by the issuance of bonds to finance the construction of the Bitcoin Citya city that will be powered by geothermal electrical energy generated from the Tecapa volcano and later from the Conchagua volcano, as reported by CriptoNoticias.

Until now, the Government has not given details about the regulatory framework planned for the issuance of Bitcoin Bonds, although it is clear that everything that the Central American country had planned with this financial instrument has been delayed.

These are always tentative dates, I cannot determine the variations of the market. He could not have known that it was going to trigger a war between Russia and the Ukraine. There is an international context that we have to review to see when it is the right time to leave.

Alejandro Zelaya, Minister of Finance of El Salvador.

Zelaya added that Bitcoin bonds are part of the strategies with which the Government seeks to diversify financing optionsaccording to what was reported by a local television channel.

Finance Minister Alejandro Zelaya said that the delay in the launch of bitcoin bonds is due to the war in Russia and Ukraine. Source: YouTube/canal33.

The world is in crisis and El Salvador’s bitcoin bonds are delayed

Last Thursday, President Nayib Bukele announced a series of measures to alleviate the economic crisis that was already hitting the country and that has been exacerbated by the Russian invasion of Ukraine.

In a message on state radio and television, Bukele stated that “the economic crisis caused by everything left by the COVID 19 pandemic is exacerbated by the conflict that is currently taking place between Russia, Ukraine and NATO.”

The war in Ukraine slows world economic growthwarned on Thursday Kristalina Georgieva, general director of the IMF, who maintained that the context is one of pressure on food prices and deterioration of the confidence of consumers and companies.

With this scenario, the IMF will cut its global growth forecast due to the war, announced Georgieva, who also argued that a Russian default is no longer “an unlikely event.”

However, in the context of war, global investors are buying stakes in cryptocurrency funds and companiesas they seek exposure to a sector that many believe could withstand the fallout from the war between Russia and Ukraine.

Research firm Fundstrat showed that venture capital investing is consistent with ample weekly inflows. Since the beginning of the year, weekly investments in the industry have averaged between $800 million and around $2 billion, which would favor El Salvador with its bitcoin-based bond issuance.

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