El Salvador’s pioneering foray into tokenized debt issuance has encountered significant hurdles. The initial debt offering, envisioned as a trailblazer in the nation’s financial landscape, has failed to garner the anticipated investor enthusiasm, thwarting plans for the subsequent phase of the project.

Bitfinex Securities, the firm granted the first license to issue digital asset securities in El Salvador, disclosed that the offering amassed a mere $342,000, markedly below the $500,000 threshold necessary to progress. This shortfall has stymied the initiative aimed at constructing a Hilton-branded hotel adjacent to El Salvador International Airport, a project spearheaded by Inversiones Laguardia. The goal was to secure $6.25 million for the development of an 80-room hotel spanning 4,484 square meters, but the effort only yielded a fraction, just over 5% of the target.

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In response to this tepid reception, Bitfinex Securities announced plans to refund the investments made by current participants, while urging Inversiones Laguardia to revise the offering to enhance its attractiveness to future investors. To entice participation, the issuer had proposed incentives such as complimentary hotel stays, contingent on the investment amount, with a minimum investment threshold set at $1,000.

Despite this setback, the issuance received commendation from Paolo Ardoino, CEO of Tether, who lauded it as a “significant advancement in the evolution of El Salvador’s nascent capital market and the introduction of a substantial new asset class.” However, the lackluster performance suggests a more subdued demand for such digital financial instruments than initially projected.

Compounding this issue is the fact that El Salvador has yet to launch its much-anticipated “volcano bonds,” a debt instrument intended to finance the ambitious Bitcoin City, a Bitcoin-centric metropolis powered by geothermal energy.