El Salvador is poised to make a significant move in the cryptocurrency space with the anticipated launch of its Bitcoin bonds, commonly referred to as “Volcano Bonds,” in early 2024. This development follows the recent regulatory approval by El Salvador’s Digital Assets Commission.
According to a statement from The National Bitcoin Office (ONBTC) on December 11, the Volcano Bond is expected to be launched during the first quarter of 2024. Nayib Bukele, El Salvador’s President and a strong proponent of Bitcoin, also appeared to confirm this news in a social media post asking, “Wen volcano bond,” and shared several posts indicating the bond’s issuance in Q1 2024. The idea of issuing Volcano Bonds first emerged in November 2021.
El Salvador took a groundbreaking step by passing legislation on January 11 that laid the legal groundwork for the Bitcoin-backed bond. The primary objectives of the Volcano Bond are to reduce the country’s sovereign debt and finance the construction of the proposed “Bitcoin City.”
The ONBTC announced that the bond would be issued on the Bitfinex Securities Platform, a blockchain-based trading platform for equities and bonds registered in El Salvador. This move marks the start of Bitcoin-based capital markets in the nation. The bonds, with a tenure of 10 years, are set to offer an annual return of 6.5% to investors.
In a related development, El Salvador recently initiated a $1 billion Bitcoin mining project, named after the Conchagua volcano, which will utilize the country’s volcanic resources. This project is being undertaken in collaboration with Luxor Technology.
The approval of the Volcano Bonds comes about 21 months after Alejandro Zelaya, the former finance minister of El Salvador, initially projected a mid-March 2022 launch for the bonds. The delay in the launch highlights the complexities and challenges involved in introducing innovative financial instruments in the cryptocurrency domain.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up