Alejandro Zelaya is El Salvador’s treasury Minister. He has provided information about the future of the issuance and the possibility that these could be issued by La Geo. La Geo is the nation’s geothermal power company. Zelaya also mentioned the date of issuance, hinting that the bonds could be issued in May or July.

El Salvador Might Issue Bitcoin Bonds Through La Geo

Alejandro Zelaya is El Salvador’s treasury Minister. He discussed the issuance and possible connections to La Geo, the national geothermal power company. In an interview offered to a local television program, Zelaya stated that they will be issuing the bitcoin bonds through La Geo, which will have the responsibility of backing the instrument.

Zelaya assured future investors that the state would still be responsible for bond issuance and give guarantees to bondholders under this model. Zelaya stated:

If it is issued either by La Geo, or the Salvadoran State it is, in the end it is a State debt. All capital is contributed by the state. These companies are state-owned entities.

The bitcoin bonds were proposed by the president of the country, Nayib Bukele, as a means of getting financing for constructing Bitcoin City, a city to be powered by geothermal energy. The bitcoin would back the first issue of bonds, which will offer 6.5%.

Issuance Date Still Undecided

Zelaya also asked about the exact date and hour at which these bonds will go on the market. Zelaya said that these bonds could be out in March or April. He noted, however, that the current situation is not favorable to this date. He mentioned that June and May could be favorable for bond issuance.

The minister also stated that there are very few chances for the issuance after September. Zelaya stated that they expect to oversubscribe and cited $1.5 billion as the target amount the government hopes to achieve through this initiative.

The country has been preparing its legal framework for the launch of these bonds since January when 20 bills were drafted to support their issuance.

What do you think about the current situation of the bitcoin bonds and their issuance in El Salvador? Comment below.

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