El Salvador Bitcoin Bond Delayed Due to Security Concerns: Tether CTO
El Salvador, the Central American nation that adopted Bitcoin (BTC) as legal tender last September, has delayed the launch of its billion-dollar Bitcoin bond again.
The Bitcoin bond, also known as the “Volcanic bond” or Volcanic token, was first announced in November 2021 as a way to issue tokenized bonds and raise $1 billion in returns from investors. The collection will then be used to build a “Bitcoin City” and buy more BTC.
The bond was to be issued in the first quarter of 2022, but was postponed until September in the wake of unfavorable market conditions and geopolitical crises. However, earlier this week, Bitfinex and Tether Chief Technology Officer Paolo Ardoino revealed that the Bitcoin bond will be delayed again until the end of the year.
Ardoino, in an exclusive conversation with Cointelegraph, revealed that the current delay in the launch can be attributed to the internal security issues where the nation’s security forces have had to confront the scourge of gang violence in the country. This has diverted the focus of government resources, and “The delay in the launch of the Volcano Token must be seen in this context.”
Bitfinex is the main infrastructure partner of the El Salvador government responsible for processing transactions from the sale of volcanic tokens. However, Bitfinex must first acquire an issuance license from the government, which will be granted after the passage of the digital securities bill scheduled for September.
Ardoino confirmed that the final draft of the bill is ready and they expect the bill to be passed in the next couple of weeks, given President Nayib Bukele’s party has a majority. He said:
We are confident that the law will receive approval from Congress in the coming weeks, provided the country has the necessary stability for such legislation to be passed.”
Bitfinex Securities El Salvador, SA de CV “will apply for a license to operate under El Salvador’s digital securities regulations once enacted into law,” he added.
While several reports and market experts have blamed the waning investor interest and the current downturn in the crypto market, Ardoino believes that the idea behind the Bitcoin bond will gain investor interest regardless of market conditions.
Related: El Salvador’s ‘My First Bitcoin’: How to Teach a Nation About Crypto
He added that the Bitcoin bond has the potential to accelerate BTC adoption. Citing the example of meme coins, he explained:
“When you consider that the meme coin, Dogecoin, was able to achieve a market cap of $48 billion, there is clearly enough investor appetite in the digital token economy to support a $1 billion volcano.”
After making BTC legal tender on September 7, 2021, El Salvador accumulated over 2,301 BTC for approximately $103.9 million. During the bull market, the profits from the investment were even used to build schools and hospitals, but with the current downturn in the market, BTC holdings are currently worth around $45 million.
