El Salvador Volcano Bonds Gets Approval to Launch
JAKARTA - El Salvador's anticipated Bitcoin bonds, also known as "Volcano Bonds," have reportedly received regulatory approval for launch in early 2024.
Volcano Bond was approved by El Salvador's Digital Assets Commission and is anticipated to launch during the first quarter of 2024, according to a Dec. 11 statement from the National Bitcoin Office (ONBTC).
The pro-Bitcoin leader and president of the country, Nayib Bukele, also appeared to confirm the news in a personal post, with the caption: "Wen volcano bond," while also posting several posts noting that the bonds will be issued in Q1 2024.
The possibility of the El Salvador government issuing Volcano Bonds first emerged in November 2021.
El Salvador first passed historic legislation providing a legal framework for Bitcoin-backed bonds on January 11. Volcano Bond is intended to pay off government debt and fund the construction of a proposed “Bitcoin City.”
ONBTC said that the bonds will be issued on the Bitfinex Securities Platform, a blockchain-based trading site for equities and bonds registered in El Salvador.
SEE ALSO:
This marked the beginning of a Bitcoin-based capital market in the country, with the bonds having a maturity of 10 years and paying 6.5% in annual returns to holders.
"We support the El Salvador government's commitment to the development of a Bitcoin-based capital market and are happy to be part of their economic transformation. We look forward to the launch of the new issuance in the first half of 2024," said Paolo Ardoino, CTO of Bitfinex Securities who is also a supporter of Volcano Bond.
El Salvador recently launched a 241 megawatt, US$1 billion (IDR 15.6 trillion) Bitcoin mining project, which will access the country's volcanic resources through a partnership with Luxor Technology. Conchagua is the name of the volcano that will power the country's mining operations.
This approval comes nearly 21 months after the country's former finance minister, Alejandro Zelaya, said that the Volcano Bond would be launched in mid-March 2022.