El Salvador’s Finance Minister Alejandro Zelaya has said the country will further delay the launch of its anticipated billion dollar bitcoin (BTC) bond, citing price volatility and uncertain market conditions as a result of the ongoing Russo-Ukrainian war.
The news comes at the same time that Amnesty International accused the Salvadoran authorities of “gross violations of human rights and criminalizing people living in poverty”.
On June 1, in an interview on the local “Fente a Fronte” (face-to-face) news program, Zelaya was asked whether the situation for issuing $1 billion bitcoin bonds had changed from “a few months ago”.
“no not now, [Bitcoin] The price is hampered by the war in Ukraine,” he said, according to a rough translation. He said that “in the short term the variances are stable but in the long term it always appreciates in value.”
“There is a future and there is an economic innovation” [in Bitcoin] That’s what we should bet on.”
The plan for the bond was originally announced by El Salvador President Nayib Bukele in November 2021. Half of the expected $1 billion goes to the construction of a “Bitcoin City” near a volcano with the idea that its geothermal energy could be used for bitcoin miners. The other half of the money raised will be invested in bitcoin.
The $1 billion bond was originally scheduled to launch in mid-March 2022, but in an interview in March Zelaya delayed the launch, citing price volatility, with a possible launch date around June extending to September 2022. given with.
Growing fears that the country could default on an $800 million bond in January 2023 caused ratings agency Moody’s to downgrade El Salvador’s credit rating on May 4, citing “the lack of a credible financing plan”. .
The government of El Salvador has been buying bitcoin since September 2021, with Bukele announcing that the country had bought another 500 BTC on May 9, El Salvador estimated to have lost over $35.6 million from its BTC investment so far.
Amnesty International: “Human Rights Crisis”
Meanwhile, human rights advocacy non-profit Amnesty International accused El Salvador’s government of committing “large-scale human rights violations” through arbitrary arrests, abuse and torture of prisoners.
A state of emergency (SOE) was declared by President Bukele on 27 March due to the rising murder rate, which the government blamed on gangs and organized crime. The SOE has since been extended twice.
The human rights group said the SOE has changed laws and legal procedures that undermine the right to defense, the presumption of innocence, effective judicial measures and access to an independent judge.
related: El Salvador’s bitcoin game: what does the current recession mean for adoption?
More than 35,000 people have been imprisoned in less than three months during the crackdown, with an increase in arrests detaining 1.7% of the country’s population over the age of 18, resulting in more than 250% prison Overcrowded beyond capacity.
0 murders.#seguimos https://t.co/Dzcs18bjpA— nayibbukele (@nayibbukele) 2 June 2022
But despite the abuses, many El Salvadorians agree with Bukele’s drastic measures because the president is popular in opinion polls. The most recent poll released by local media on 1 June shows an approval rate of around 87% for the current president.