• El Salvador has received commitments totaling $300 million for its Bitcoin bond

  • According to Samson Mow, chief strategy officer of Blockstream, investors have so far committed $300 million to El Salvador’s bitcoin-backed bonds.

    • El Salvador intends to sell $1 billion in US dollar-denominated 10-year bonds with a 6.5 percent coupon. The securities will not be available until the first three months of 2022.
    • Blockstream, a Canadian blockchain firm, will act as bookrunners in an issue handled by cryptocurrency exchange Bitfinex.
    • Mow, the main architect of the bitcoin bond, said in a tweet on Dec. 7 that the $300 million were only “verbal commitments” at this point.
    • He also stated that the final term sheet – a non-binding agreement outlining the basic terms and conditions of an investment – was not yet complete.
    • The “verbal commitments” mean, however, that the El Salvador bitcoin bond, or EBB1, as its ticker will reflect at launch, is “already 30 percent filled” several weeks ahead of the official launch.
    • El Salvador hopes to raise $1 billion, $500 million of which will be used to build energy and bitcoin mining infrastructure, and $500 million will be used to purchase additional bitcoin, which will be kept in cold storage within the country.
    • On December 4, El Salvador congressman William Soriano told BeInCrypto that the Central American country plans to issue up to ten bitcoin bonds in the future. The proceeds will be used to construct the Bitcoin city as well as to repay the International Monetary Fund (IMF).
    • EBB1 is designed to appeal to both traditional institutional investors and everyday people. According to Mow, the bond will be sold in $100 increments in order to “democratize access to the bond.”
    • “That’s the whole point, an instrument that empowers people in the same way that bitcoin empowers people,” he added.
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