El Salvador Bitcoin Bond Delayed by Security Issues: Tether CTO

El Salvador, the Central American country that adopted Bitcoin (BTC) as legal tender in September last year, has delayed the relaunch of its billion-dollar bitcoin bond.

Bitcoin bonds, also known as “volcano bonds” or volcano tokens, were first announced in November 2021 to issue tokenized bonds and raise $1 billion from investors. The fundraising will be used to build “Bitcoin City” and buy more BTC.

The bond was scheduled to be issued in the first quarter of 2022, but was pushed back to September due to unfavorable market conditions and geopolitical crises. However, earlier this week, Bitfinex and Tether Chief Technology Officer Paolo Arduino stated that the Bitcoin bond would be delayed again until the end of the year.

In an exclusive chat with Cointelegraph, Arduino revealed that the delay in the launch could be due to internal security issues faced by the country’s security forces due to the scourge of gang violence in the country. This has diverted the attention of government resources and “the delay in the launch of the Volcano token must be seen in this context.”

Bitfinex is a key infrastructure partner of the Government of El Salvador responsible for conducting Volcanic Token Sale transactions. However, Bitfinex must first obtain an issuance license from the government, which will be granted after the passage of the Digital Securities Bill, which is slated for September.

Arduino confirmed that the final draft of the law has been prepared, and that they expect the law to be passed in the next two weeks as President Naib Bukele’s party has a majority. he said:

We are confident that the legislation will receive approval from Congress in the coming weeks.

Bitfinex Securities El Salvador, SA de CV added, “Once this is passed into law, they will request a license to operate under El Salvador’s digital securities regulatory framework.”

While several reports and market analysts have blamed declining investor interest and the ongoing downturn in the crypto market, Arduino believes that the idea behind the Bitcoin bond will attract investor interest regardless of market conditions.

Related: El Salvador’s ‘My First Bitcoin’: How to educate a public about crypto

He added that BTC bonds have the potential to accelerate BTC adoption. Citing the example of meme coins, he explained.

“When you consider that the meme coin, Dogecoin, has achieved a capitalization of US dollars, it is clear that there is enough investor interest to support a $1 billion volcano in the digital token economy.”

Since making BTC legal tender on September 7, 2021, El Salvador has accumulated more than 2,301 BTC worth around $103.9 million. During the bull market, the profit from the investment was used to build schools and hospitals, however, with the fall in the market, BTC holdings currently reach 45 million dollars.