El Salvador Receives $300 Million in Commitments for Its Bitcoin Bond

7 December 2021, 16:58 GMT+0000
Updated by Jeffrey Gogo
8 December 2021, 17:44 GMT+0000
In Brief
  • Investors have so far committed $300 million towards El Salvador's bitcoin-backed bonds, according to Samson Mow.
  • The commitments, which remain verbal at this stage, mean that the El Salvador bitcoin bond is already 30% filled several weeks ahead of official launch.
  • El Salvador congressman William Soriano says the Central American country is planning to issue up to 10 bitcoin bonds in future.
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Investors have so far committed $300 million towards El Salvador’s bitcoin-backed bonds, according to Samson Mow, chief strategy officer of Blockstream.

● El Salvador is planning to sell $1 billion in U.S. dollar-denominated 10-year bonds with a coupon of 6.5%. The securities will only be issued sometime in the first three months of 2022.

● Canadian blockchain firm Blockstream will act as the technology consultant and crypto exchange Bitfinex as bookmakers.

● In a tweet on Dec. 7, Mow, the main architect of the bitcoin bond, said the $300 million represented only “verbal commitments” at this stage.

● The final term sheet – a non-binding agreement highlighting the basic terms and conditions of an investment – was also not yet ready, he added.

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● However, the “verbal commitments” mean that the El Salvador bitcoin bond, or EBB1, as its ticker will reflect at launch, is “already 30% filled” several weeks ahead of official launch.

● Of the $1 billion that El Salvador is targeting to raise, $500 million will be used to construct energy and bitcoin mining infrastructure and $500 million to buy even more bitcoin, to be kept in cold storage within the country.

● El Salvador congressman William Soriano told BeInCrypto on Dec. 4 that the Central American country is planning to issue up to 10 bitcoin bonds in future. Proceeds will be used to build the Bitcoin city and to pay-off the International Monetary Fund (IMF).

● EBB1 is structured in a way that targets both traditional institutional investors and ordinary people. Mow says the bond will be sold in $100 tranches to “democratize access to the bond”.

● “That’s the whole point, an instrument that empowers the people just as bitcoin empowers the people,” he added.

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Disclaimer

BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.