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

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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.

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● 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.

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● 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.

● 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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Jeffrey Gogo is a versatile financial journalist based in Harare, Zimbabwe. For more than 17 years, he has written extensively on local and global financial markets; economic and company news. A climate change enthusiast, Gogo's work has appeared in Zimbabwe's biggest daily The Herald, Thomson Reuters Foundation, Bitcoin.com and several online publications. Gogo first encountered bitcoin in 2014, and began covering cryptocurrency markets in 2017.

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