State Geothermal Company La Geo Might Issue Salvadoran Bitcoin Bonds, Delays Possible

Zelaya also mentioned the date of issuance, hinting that the bonds could be released to the public in May or July.

El Salvador Might Issue Bitcoin Bonds Through La Geo

Alejandro Zelaya is El Salvador's treasury Minister. He discussed the issue of bitcoin bonds as well as how they might be connected to La Geo, El Salvador's national geothermal power firm. Zelaya said in an interview to a local television station that the bitcoin bonds will be issued through La Geo. La Geo will be responsible for backing the instrument.

Zelaya assured future investors that the state would still be responsible for bond issuance under the model and gave guarantees to bondholders. Zelaya stated:

It doesn't matter if it is issued by La Geo, the Salvadoran State or any other entity, it will always be a State debt. All capital is contributed by the state. These companies are state-owned entities.

President of the country Nayib Bukele proposed the bitcoin bonds as a way to get financing to build Bitcoin City. This city will be powered by geothermal power. Bitcoin would back the first issue of bonds, which will offer 6.5%.

Date of Issuance Still Undetermined

Zelaya also asked about the exact date and hour at which these bonds will go on sale. Zelaya said that these bonds could be available for purchase in March or April. He noted, however, that the current situation is not favorable to this date. He mentioned that June and May could be favorable for bond issuance.

The minister also stated that there are very few chances for the issuance of the bonds to make a significant impact after September. Zelaya stated that they expect to oversubscribe and cited $1.5 billion as the target amount the government hopes to achieve through this initiative.

Since January, when 20 bills were created to support the issuance of these bonds, the country has been preparing its legal infrastructure.