El Salvador to issue first Bitcoin bonds in March

El Salvador will complete preparations for issuing the first $1 billion bitcoin bonds by March 15–20.

According to Finance Minister Alejandro Zelaya, the oversubscription to the securities is expected to be no less than $500 million. The minimum purchase of $100 and the absence of a broker at the placement will widen the pool of potential investors, the official said.

According to the previously announced plan, the coupon rate will be 6.5% per year and the bonds will mature in 2032. To purchase the securities, KYC procedures will be required.

The issue will be conducted on Blockstream’s Liquid Network sidechain.

Settlement of the issue will be handled by Bitfinex Securities, a platform for trading tokenized securities. Under the agreement, the latter will also help the Salvadoran government develop a regulatory framework for blockchain-based digital financial instruments.

According to the press release, half of the proceeds from the sale of the bonds will be directed toward developing the mining infrastructure on geothermal volcanic energy. The other 50% will be allocated to the purchase of digital gold for the state trust.

At the IMF has expressed concerns about the risks associated with El Salvador’s bitcoin bonds. The institution repeatedly urged the government to abandon the cryptocurrency as a means of payment.

In February, the Salvadoran government improved the functionality of the Chivo digital wallet.

Earlier, President Nayib Bukele said the rise of bitcoin is a matter of time.

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