30 Mar 2022 · 3 min read

Bitfinex Customers Wait for Details on El Salvador’s BTC Bonds with Potential USD 0.5bn Worth of Interest

Source: Adobe/Milosz Maslanka

 

The crypto exchange Bitfinex, which will host the issuance of El Salvador’s much-talked-about bitcoin (BTC) bonds, says that it has already received “half a billion dollars” worth of interest in the offering from its customers.

The Financial Times quoted Bitfinex Chief Technology Officer Paolo Ardoino as stating:

“Some of our users have proactively reached out to us to express their interest. They are definitely interested in participating in this but they are waiting for the details to be published.”

The same media outlet quoted an unnamed “industry executive who has experience of working with Bitfinex” as stating:

“There is a ton of wealth that is outside the banking system and wants to remain outside it.”

The unnamed executive added that such investors were willing to buy government debt “in a crypto-friendly manner” even if they stood to “make less in terms of returns.”

Ardoino confirmed that Bitfinex is effectively playing a waiting game, admitting that “fuller details of the terms of the bond” would not emerge until the government unveils its new securities legislation – which Bukele says is “in the oven.”

Ardoino said:

“The timeline for that could be from one week to a couple of months. That’s the main blocker for us to move forward.”

The Financial Times also quoted “people close to the project” as “betting that big players in the crypto community” would view the bonds as “an attractive investment, despite the relatively low returns and uncertainties surrounding them.”

The media outlet also quoted more unnamed “people involved in the project” as claiming that investors liked the idea of the bonds’ “world-first” status, adding:

“There is a desire to be part of something so groundbreaking.”

But the media outlet also pointed to an analysis piece published by the British banking giant Barclays, which concluded that “there seems to be little chance of a transaction any time soon.”

The unnamed sources also opined that traditional investors were likely to give the project a wide berth, and stated that bitcoin whales would be much more likely to invest.

The Barclays analysts also expressed skepticism about Bukele’s wider BTC adoption plans, explaining:

“The impact of Bitcoin in El Salvador so far, in our view, has been to increase macroeconomic potential risks rather than introduce any material change in how economic transactions are conducted.”

Figures in the world of traditional finance have questioned the ability of LaGeo, the Salvadoran firm that has been charged with issuing the bonds, to handle a bond issuance of this size.

Bukele wants to use the funds raised in the offering to pay for the construction of a tax-free haven for international bitcoiners named Bitcoin City.

As previously reported, the bonds had been slated for release earlier this month, but were delayed “until September at the latest,” per the government. However, the issuance appears to have been sidelined either by the war in Ukraine or pension-related matters – President Nayib Bukele and his finance minister appear to have given contradictory statements on the matter.

In addition, the government had promised “52” new securities-related laws to lay the groundwork for the issuance – none of which appear to have materialized as of yet.

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Learn more:
- Bitcoin Royalty Flock to Bukele’s Court as President Talks of ‘Short Delay’ to BTC Bonds
Game Theory of Bitcoin Adoption by Nation-States


-  El Salvador’s Bitcoin Bonds May Be Delayed Until September, Says Finance Chief
- Ukraine War Throws Timing of El Salvador’s Bitcoin Bond Debut into Doubt
- El Salvador's President Bukele Silent on Ukraine War


- El Salvador's Bukele Says 52 Bitcoin Reforms Are ‘In the Oven', Critics Hit Out at Lack of Adoption Benefits
- ‘Developing Economies’ Tracking El Salvador’s Bitcoin Moves with Interest
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(Updated on March 31 at 19:05 UTC to clarify that Bitfinex customers are waiting for more details before deciding to invest in the bonds.)