El Salvador, the first country to adopt Bitcoin as legal tender in September 2021, has officially approved the highly anticipated Bitcoin bonds known as ‘volcano bonds.’ The regulators have given the nod for an early 2024 launch of the bonds.
The Central American country’s Digital Assets Commission granted approval for issuing Bitcoin bonds, and the launch can be expected in early 2024, as stated by the National Bitcoin Office (ONBTC).
Volcano Bonds: El Salvador Moves Closer to Bitcoin Bonds
The President of El Salvador, Nayib Bukele, confirmed the news in a post on X captioned “Wen volcano bond?” while reposting several reports breaking the news to the Bitcoin community. It is important to note that Bitcoin enthusiasts have been waiting since 2021 for the debut of volcano bonds.
Notably, El Salvador passed its landmark “Digital Asset Issuance” legislation in January to pave the path for Bitcoin bonds. The bill was passed on January 11 with 62 votes for and 16 against.
In the X post, ONBTC also noted that the bond will be issued on the Bitfinex Securities Platform, a trading platform for blockchain-based equities and bonds registered in the Central American country. More importantly, this marks the beginning of a Bitcoin-based capital market in El Salvador, which is said to last 10 years and pay 6.5% in annual returns to holders.
Related reading: President of El Salvador Enacts Legislation Removing Taxes on Technological Innovations
As per an earlier statement from Bitfinex, the technology provider for the bonds, the Volcano Bonds—or Volcano Tokens—are expected to pay down sovereign debt and fund the construction of El Salvador’s proposed “Bitcoin City.” It noted:
“The new digital asset regulatory framework would also establish a Bitcoin Fund Management Agency, which provides oversight and administration for public offerings of digital assets issued by the state of El Salvador and its institutions.”
Related reading: World’s First Geothermal Energy Bitcoin Mining Pool Launches in El Salvador
Doubling Down on BTC
Bitfinex also stated that El Salvador has never sold a single BTC on the country’s balance sheet, while adding:
“In a year’s time, as the next halving approaches in 2024, President Bukele may emerge as a very shrewd statesman as the Bitcoin price may begin to recover.”
Earlier in December, El Salvador also debuted a 241-megawatt Bitcoin mining project worth $1 billion. The project seeks to take advantage of the country’s vast volcanic resources through a partnership with Luxor Technology to increase Bitcoin mining activities in the region without putting pressure on the power grids. The name of the volcano that will power the mining project is Conchagua.
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