Bitcoin (BTC) bond is still on hold: El Salvador's finance minister

El Salvador's finance minister, Alejandro Zelaya,

 has announced that the country will postpone the introduction of its planned billion-dollar Bitcoin bond.

The reason behing the halt is price turbulence and unpredictable market conditions caused by the ongoing Russian-Ukrainian conflict.

The announcement comes as Amnesty International accuses the Salvadoran government of committing “grave human rights breaches and criminalising the poor”.

On June 1, Zelaya was asked in an interview with a local media source if the situation with the $1 billion Bitcoin bond issuance from “a few months earlier” had changed.

"No, not yet," he answered, according to a rough translation. "The crisis in Ukraine continues to wreak havoc on the [Bitcoin] price." "He remarked that the adjustments are stable in the short term, but that it always tends to increase in value over time."

El Salvador's president, Nayib Bukele, first unveiled the bond plan in November of 2021. Half of the $1 billion expected would be used to build a "Bitcoin City" near a volcano, with the goal of using the volcano's geothermal energy to power Bitcoin miners. The remaining half of the assets will be invested in Bitcoin.

The $1 billion bond was supposed to go on sale in mid-March 2022, but in a March interview, Zelaya said the launch would be postponed due to market instability, suggesting a June start date and a timetable of till September 2022.

Fears that El Salvador would fail on an $800 million bond due in January 2023 prompted Moody's to reduce the country's credit rating on May 4, citing a "lack of a viable financing plan."

El Salvador's government has been buying Bitcoin since September 2021, with Bukele stating on May 9 that the country had purchased another 500 BTC. The country's BTC investments are reported to have lost more than $35.6 million so far.