El Salvador’s Bitcoin Bond Approved for Q1 Launch

Dec. 12, 2023
El Salvador’s Bitcoin Bond Approved for Q1 Launch

El Salvador’s much-anticipated Bitcoin bonds, colloquially known as “Volcano Bonds,” have obtained regulatory approval for issuance in early 2024. The Digital Assets Commission of El Salvador approved the Volcano Bond on December 11, marking a crucial step in the country’s crypto-centric financial initiatives.

El Salvador’s Crypto Boom: Q1 2024 Financial Launch

The National Bitcoin Office (ONBTC) announced a statement the same day. El Salvador’s pro-Bitcoin leader, Nayib Bukele, seemingly corroborated the news through a post on social media with the caption: “Wen volcano bond.” Bukele also shared and reposted several messages from different sources confirming that the bonds are scheduled for issuance in the first quarter of 2024.

Furthermore, El Salvador issued Volcano Bonds, first introduced in November 2021. The country laid the groundwork for this financial instrument when it passed groundbreaking legislation on January 11. Moreover, this provided the legal framework for a Bitcoin-backed bond. The primary objective of the Volcano Bond is to alleviate sovereign debt and finance the construction of “Bitcoin City,” a visionary project in El Salvador.

El Salvador Approves Volcano Bond on Bitfinex

ONBTC states the Volcano Bond will be issued on the Bitfinex Securities Platform. It’s a trading site for blockchain-based equities and bonds registered in El Salvador. This move is a significant stride towards establishing Bitcoin-based capital markets in the country. The issuer designed the bonds to have a tenure of 10 years, offering holders a 6.5% annual return.

Moreover, this approval follows El Salvador’s recent launch of a $1 billion, 241-megawatt Bitcoin mining project. The initiative, executed in partnership with Luxor Technology, harnesses the country’s volcanic resources. The Conchagua volcano, earmarked for the project, will be the powerhouse for El Salvador’s burgeoning Bitcoin mining operations.

Notably, the regulatory green light comes almost 21 months after the former finance minister of El Salvador, Alejandro Zelaya, made projections. He anticipated a mid-March 2022 launch for the Volcano Bond. The delay in the timeline underscores the complexity of the processes involved in developing new financial instruments.

However, this is especially true for those connected to the unpredictable realm of cryptocurrencies. El Salvador pioneers integrating Bitcoin into its economic landscape. The Volcano Bond is a testament to the country’s commitment to exploring innovative financial avenues.

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Rida Fatima

News writer
An ardent wordsmith with a rich five-year background in delving into the realms of finance and cryptocurrencies. Alongside curating captivating blogs, Unique's talents extend to crafting imaginative and engaging content.