- El Salvador May Launch Its Bitcoin Bond Between March 15 and 20
- The U.S. Federal Reserve will hold its FOMC meeting on March 15-16, and the choice of date is particularly striking
- The $1 billion bond is part of President Bukele’s plan to raise money to buy more BTC and build the first “Bitcoin City”
- El Salvador’s “Bitcoin City” to be located in La Unión, powered by geothermal energy
El Salvador reportedly hopes to launch its highly anticipated bitcoin bond between March 15 and 20.
The country's Finance Minister Alejandro Zelaya announced the possible release date on the Salvadoran TV show "Frente a Frente". He also detailed that the bond will be issued on Liquid, a Bitcoin-based service created by Blockstream.
El Salvador's bitcoin bond is worth $1 billion and has a coupon rate of 6.5%. The bonds are part of President Naib Bouclé's plan to build a "Bitcoin City" in the La Unión region in the southeast of the country. The city will be powered by geothermal energy from the Conchagua volcano.
500 million in Bitcoin bond proceeds will be used to buy more Bitcoins, 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 time to issue bonds".
Coincidentally, the dates mentioned as a possible timeframe for the Salvadoran bitcoin bond issue also overlap with the FOMC (Federal Open Market Committee) meeting scheduled for March 15-16.
This meeting of the FOMC is particularly important because the Fed is expected to announce a rise to start the process of curbing persistent inflation in the United States. The U.S. Consumer Price Index (CPI) came in at 7.9% in February, up 0.8% from January.
A Fed rate hike would likely lead to a brief panic sell-off in both traditional and cryptocurrency markets. It is therefore understandable that El Salvador has timed its bitcoin bond offering to coincide with the issue in order to assess global market sentiment prior to the issue.