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The Minister of Finance of El Salvador, Alejandro Zelaya, affirmed this Tuesday (03.22.2022) that the Government is “ready” to issue bitcoin bonds for 1,000 million dollars through an energy company.
“In terms of issuing bitcoin bonds, we are ready to do it, we are waiting for the right moment” and “waiting for the approval of President Nayib Bukele,” Zelaya said in a television interview.
However, the head of the Treasury argued that he considers that it is not yet the time to carry out the issue, but pointed out that “the ideal dates” to “go on the market” are in the first half of the year. He stated, without disclosing details, that there are “interested buyers” in these bonds for a “good amount” of money and that the demand exceeds the offer of 1,000 million by 500 million.
“I think we are going to have a fairly substantial oversubscription (demand) that we might channel towards other financing needs that the country has,” assured the head of the Treasury.
Zelaya confirmed that the issuance of these bonds will not be done directly by the government, but “we are going to channel it through LaGeo“, which is the company that manages the generation of geothermal energy. “If it is issued by the State or issued by LaGeoin the end it is always a debt of the State” because “the majority of shares” belong to the autonomous Hydroelectric Executive Commission of the Lempa River (CEL).
When questioned if the assets of LaGeo are sufficient to cover the debt, Zelaya maintained that “we are going to give the bond a sovereign guarantee” with “the planning and projects of LaGeo and CEL Group”.
Economist Ricardo Castaneda, from the Central American Institute for Fiscal Studies (ICEFI), told the agency Eph at the end of February that the result of the issuance of bitcoin bonds for 1,000 million dollars will largely mark the future of Bukele’s “political project” and the adoption of this cryptocurrency. For Castaneda, “with this instrument, the Government plays a good part of its political project.”
“If the placement of these bonds is a success, the government will effectively be able to laugh at the multilateral organizations, because it would have found an alternative source of resources,” he pointed out.
The International Monetary Fund (IMF) urged the country to “limit the scope of the Bitcoin Law by eliminating its status as legal tender” and also expressed its “concern” regarding the issuance of these bonds.
ama (efe, reuters, afp)
