El Salvador could launch its Bitcoin bond between March 15th and 20th
The choice of dates stands out as the U.S. Federal Reserve has an FOMC meeting from March 15th to 16th
The bond, worth $1 Billion, is part of President Bukele’s plans of raising funds to buy more BTC and build the first-ever ‘Bitcoin City’
El Salvador’s ‘Bitcoin City’ will be located in La Unión and powered by geothermal energy
El Salvador is reportedly looking to launch its highly anticipated Bitcoin bond between March 15th and 20th.
The country’s Finance Minister, Alejandro Zelaya, made the announcement of the possible launch dates on the Salvadorian TV Show ‘Frente a Frente’. He also elaborated that the bond would be issued on Liquid, a Bitcoin-based service created by Blockstream.
El Salvador’s Bitcoin bond is worth $1 Billion and will carry a coupon rate of 8.5%. The bond is part of President Nayib Bukele’s plans of building a ‘Bitcoin City’ in the country’s south-eastern region of La Unión. The city will be powered by geothermal energy from the Conchagua volcano.
$500 million of the proceeds from the Bitcoin bond will be used to buy more Bitcoin which will be locked up for five years. The other half will be used to build the energy and Bitcoin mining infrastructure needed to power the city.
According to Reuters, El Salvador is ‘looking for the right timing to launch the bond’.
Coincidentally, the dates mentioned as a probable timeframe for the launch of the El Salvador Bitcoin bond, also overlap with the scheduled FOMC (Federal Open Market Committee) meeting on March 15th to 16th.
This meeting by the FOMC is particularly important as it is expected that the U.S. Federal Reserve will announce an interest rate hike meant to start the process of taming the ongoing inflation in the United States. February’s Consumer Price Index (CPI) in the U.S. was at 7.9% indicating a 0.8% increment from the month of January.
A rate hike by the U.S. Federal Reserve will most likely result in a brief moment of panic selling in traditional and crypto markets. Therefore, it is understandable that El Salvador has scheduled the launch of its Bitcoin bond around the same time to gauge the mood of the global markets before launching it.