El Salvador may have already raised its billion-dollar bitcoin bond – $500 million in verbal commitments, says a report. Blockstream, a tech firm that is coordinating the bond, told the Wall Street Journal that half is done, but the figure hasn’t been confirmed.
The Central American country had announced the bitcoin bond in November 2021. About half of the funds are to be used for more bitcoin purchases, and the other half for bitcoin mining infrastructure and energy. However, there have been some noted pushbacks.
Ratings agency Fitch, about a week ago, downgraded El Salvador’s long-term foreign-currency issuer default rating (IDR) to CCC. This shows heightened risk stemming from increased reliance on short-term debt and limited scope for additional local market financing. Fitch is uncertain about El Salvador’s prospect of raising funds for the offering.
A financial executive in El Salvador described the offering as a meme bond, wherein people are interested in the novelty of it. He believes there will be no problems in raising the money for the bitcoin bond. Crypto enthusiasts are very much excited about this. The Central American country is also looking at raising about $5 billion more in bitcoin-backed bonds in the future.
Meanwhile, El Salvador President Nayib Bukele has expressed distaste about US senators introducing legislation to probe El Salvador’s Bitcoin Law. He brushed off US’s interference and highlighted that Washington has zero jurisdiction on El Salvador – a sovereign and independent nation. Bukele told the US to back off and stay out of El Salvador’s internal affairs. He also advised the US to not try and control something it can’t control.