The government of El Salvador announced the ambitious project of constructing a Bitcoin City and in order to finance it, it came up with the idea of issuing bitcoin bonds.
However, as it turns out, the launch of the said bonds will once more be subject to a delay. The exchange that will offer these bonds is Bitfinex and its CTO, Paolo Ardoino, recently disclosed this fact.
He stated that the legal framework that is required for issuing these digital securities is still under development.
The idea of Bitcoin City had been announced in the previous year in El Salvador after the country adopted bitcoin as a legal tender.
The government also announced bitcoin bonds that were aimed at funding the construction of the said city, but their launch has been subject to several delays.
According to Bitfinex’s CTO, more delays can be expected because the law framework required for supporting them is not ready as yet.
But, it should be noted that Ardoino did make a prediction about a possible launch date of the bitcoin bonds.
The CTO said that if the law is given approval by September, then it is likely that the bitcoin bonds would be rolled out within two to three months.
The Bitfinex exchange was named as the issuer of the bitcoin bonds, which would use the Liquid Network that falls under the management of Blockstream.
The bitcoin bonds are also referred to as volcano bonds because they will use geothermal energy for powering crypto mining activities in the infamous Bitcoin City.
The President of El Salvador, Nayib Bukele, had first announced these bonds in November last year and his goal was to use the said instrument for raising about $1 billion.
He had given a timeline of 60 days for the launch of the bitcoin bonds after their announcement, but things obviously did not go as planned because the launch was delayed.
A total of 20 bills had been drafted by the Salvadoran Congress for supporting the launch of the said bonds this year in January.
Alejandro Zelaya, the treasury minister of El Salvador, said in May that they had had to put the launch of the bitcoin bonds on hold because of the Russia and Ukraine war and the crypto market conditions.
He had hinted that they could launch the digital securities in May or June. But, in June, the minister clarified that there were several factors that made it unfeasible for them to launch the bonds as yet.
One of these was the ongoing Russia and Ukraine war. He had explained at the time that a number of investors who had been interested in crypto had now switched to investing in the arms industry.
This setback is not likely to please the crypto community in El Salvador and would invite more criticism from those who are already against it.
The El Salvadoran government has been criticized rather heavily for making investments in bitcoin so much.