El Salvador Volcano Bonds Oversubscribed by $.5 Billion; Honduras Next for Legal Tender

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According to the Financial Times, El Salvador’s Bitcoin (BTC) bonds have been oversubscribed by roughly 50%.

The Central American government announced in November 2021 that it will issue $1 billion in Bitcoin bonds.

The Financial Times reports that bids for the Bitcoin bonds totaled around $1.5 billion, citing El Salvador’s finance minister Alejandro Zelaya.

What’s in the Bond?

El Salvador stated last year that $0.5 billion of the bond proceeds would be used to acquire Bitcoin and the other $0.5 billion would be used to construct a city devoted to mining Bitcoin using geothermal energy.

The Bitcoin bonds have a 6.5 percent yearly coupon rate. A 50% dividend on Bitcoin’s five-year appreciation was also guaranteed.

Volcano Bonds Delayed but Expected by Mid-Year

Despite the apparent oversubscription, El Salvador’s legislative issues may prevent the secondary trading of Bitcoin bonds. Prior to selling Bitcoin bonds on the secondary market, El Salvador’s President Nayib Bukele proposed a set of legal measures.

The Russia-Ukraine war, according to Zelaya, prompted the legislative delay. Initially, the Salvadoran finance minister said the bonds would be issued in mid-March.

In December 2021, Blockstream’s Chief Strategy Officer Samson Mow announced that the platform has already collected $300 million in “soft commitments,” largely from “Bitfinex whales.” In February, Blockstream’s marketing director, Fernando Nikoli, told Cointelegraph that the Liquid Network federation will elaborate in a future blog post.

According to the Financial Times, the Salvadoran parliament has yet to approve the bond issuance.

Initially, it was believed that the bonds would be available to trade on Bitfinex, but it appears that they have backed out or were pressured.

It appears that President Bukele has turned to none other than Binance Chief Executive Officer Changpeng Zhao. It appears CZ is set to visit Bukele tomorrow.

Honduras Going Orange in the Meantime…

Meanwhile, El Salvador’s neighbor Honduras may become the second country in the world to accept Bitcoin (BTC) as payment. Honduran President Xiomara Castro remarked that El Salvador shouldn’t be the only nation that’s “escaping dollar hegemony.”

Notably, on March 18, Bitcoin maximalist Max Keiser tweeted the Honduran flag, implying that something may be occurring soon.

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