El Salvador Bitcoin bond delayed due to security concerns: Bitfinex CTO
El Salvador, the Central American nation that adopted Bitcoin (BTC) as a legal tender in September last year, 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 return from investors. The fundraiser will then be used to build a Bitcoin City and buy more BTC.
The bond was set to be issued in the first quarter of 2022 but was postponed to 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 to the end of the year.
Ardoino, in an exclusive conversation with the Cointelegraph, revealed that the current delay in the launch could 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 has to be viewed in this context.”
Bitfinex is the key infrastructure partner of the El Salvador government responsible for processing transactions from the sale of Volcanic tokens. However, Bitfinex must acquire a license of issuance from the government first, which would be granted after the passing of the digital securities bill slated for September.
Ardoino confirmed that the final draft of the bill is ready, and they are expecting the bill to be passed in the next couple of weeks, given President Nayib Bukele’s party holds a majority. He said:
“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, S.A. de C.V. “will apply for a license to operate under the El Salvador digital securities regulatory framework once this is passed into law,” he added.
While several reports and market pundits have blamed waning investor interest and the current downturn in the crypto market, Ardoino believes the idea behind the Bitcoin bond would garner investors’ interest irrespective of the 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. He cited the example of memecoins and explained:
“When you consider that the memecoin, Dogecoin, was able to obtain a market capitalization of $48 billion, there is clearly enough investor appetite in the digital token economy to support a $1 billion Volcano.”
After making BTC a legal tender on Sept. 7, 2021, El Salvador accumulated over 2,301 BTC for roughly $103.9 million. During the bull market, the profit from the investment was even used to build schools and hospitals, however, with the current downturn in the market, the BTC holdings are worth about $45 million currently.