According to Moody’s, El Salvador is the nation that first tried Bitcoin as a national currency. It may not be able to pay the debt due to the country’s anticipated ‘Bitcoin Bond,’ which is still in development.

There are many sources that contradict each other regarding the number of investors who are interested in this bond. It has received no support while it is 50% oversubscribed by the nation’s finance minister. The clock is ticking, even though the government has yet to pass legislation that would allow the bond to be approved.

The bond was announced by Nayib Bukele, El Salvador’s President, in November. This comes just two months after Bitcoin became legal tender throughout the country. It is intended to raise $1billion: $500m in Bitcoin to finance the Treasury and $500m to support development of a ‘Bitcoin City,’ which will be powered by geothermal Bitcoin miner technology. The country currently holds just over 1,800 bitcoin, which is worth approximately $70 million.

The bond was originally supposed to go live in March but it has been delayed until September. It was the inopportune moment to launch the product because Russia’s war against Ukraine had already affected the price of Bitcoin. This was the nation’s finance minister at that time. Bukele suggested that the delay could be attributed to internal pension reform.

The delay, regardless of the reason, means that the Salvadoran government cannot access the much-needed funds they need. The worst national drop was in Ukraine, when the prices for its debt fell by 15.1%. Its benchmark bond 2032 yields 24%, a level that raises concerns about buyers defaulting.

It’s not surprising that El Salvador has a very strained relationship with the International Monetary Fund. It lends money to member countries that have balance-of-payment problems. The country ended talks with the IMF. They disapproved of El Salvador’s and the Central African Republic adoptions of Bitcoin. The former president of El Salvador’s central bank has stated that El Salvador’s relationship to the IMF is now ‘practically dead’.

According to, the president and the finance minister both maintain that there is no risk of default. These words are in direct contradiction to the views of Fitch and other institutions, who have both reduced El Salvador’s credit rating over recent months. Bukele for his part isn’t listening. The president has been well-versed in both the IMF and Fitch opinions.

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