Bitcoin bond still on hold, El Salvador accused of human rights violations

Alejandro Zelaya, El Salvador’s finance Minister, has stated that the country will delay the launch of its billion-dollar Bitcoin (BTC), bond. This is due to price volatility and uncertain market conditions caused by the ongoing Russo–Ukrainian conflict.

This news comes as Amnesty International accuses the Salvadoran authorities “flagrant violations” of human rights, and of criminalizing those living in poverty.

Zelaya was interviewed by the local “Frente a Frente (Face-toFace) news station June 1, asking if the situation regarding the $1 billion Bitcoin bond issuance a few months ago had changed.

According to rough translation, he stated that “No, not yet,” the price of Bitcoin continues to be affected by the conflict in Ukraine. He said that while the volatility is short-term, the value of Bitcoin will continue to increase over time.

“There is a future, and there is an economic innovation [in Bitcoin] we should bet on.”

Nayib Bukele, El Salvador’s president, announced the plan for the bond in November 2021. The expected $1 billion will be used to build a Bitcoin City near a volcano. This is in the hope that the geothermal energy of the volcano can be used for Bitcoin miners. The remaining half of the funds would go towards Bitcoin.

Initial plans for the $1 billion bond were to launch in mid March 2022. However, Zelaya in March stated that price volatility had caused Zelaya to delay the launch and suggested that it could launch around June. The timeline would extend until September 2022.

Moody’s Rating Agency downgraded El Salvador’s credit rating due to mounting fears of default on a $800 million bond due January 2023. This was due to “lackof a credible financing strategy”.

El Salvador’s government started buying Bitcoin in September 2021. Bukele announced that the country had purchased 500 more BTC on May 9. El Salvador has lost more than $35.6 Million from its BTC investments to date.

mnesty International: Human rights crisis

Amnesty International, a human rights advocacy non profit, accused El Salvador’s government, through arbitrarily arresting, ill-treatment, and torture, of “massive violations of human rights.”

President Bukele declared a state of emergency (SOE), March 27, in response to an increase in homicide rates, which the government blamed for this on organized crime and gangs. Since then, the SOE was extended twice.

Human rights group stated that the SOE had changed laws and legal processes which undermint the rights of defense, presumption d’ innocence, effective judicial remedy, and access to an impartial judge.

Related: El Salvador’s Bitcoin Play: What does the current slump in adoption mean?

More than 35,000 people were imprisoned during the crackdown in under three months. The increase in arrests caused 1.7% of the country’s population to be in detention. This resulted in prison capacity exceeding 250% being overcrowded.

0 homicidios.#Seguimos
— Nayib Bukele (@nayibbukele) June 2, 2022

However, many El Salvadorans agree with Bukele’s harsh measures. The President is still popular in opinion polls despite all the abuses. According to the most recent poll, nearly 87% of El Salvadorans approve of the president as per local media’s June 1st release.