El Salvador’s Bitcoin bond gets regulatory approval, targets Q1 launch

El Salvador’s long-anticipated Bitcoin bonds, also known as “Volcano Bonds,” have reportedly received the regulatory nod for a launch in early 2024.

The 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).

BREAKING NEWS

The Volcano Bond has just received regulatory approval from the Digital Assets Commission (CNAD).

We anticipate the bond will be issued during the first quarter of 2024.

This is just the beginning for new capital markets on #Bitcoin in El Salvador.

— The Bitcoin Office (@bitcoinofficesv) December 12, 2023

The country’s pro-Bitcoin leader Nayib Bukele also seemingly confirmed the news in a post of his own, captioned: “Wen volcano bond,” while also reposting several posts noting that the bonds will be issued in Q1 2024.

The possibility of the country issuing the Volcano Bonds initially came about in November 2021.

El Salvador first passed the landmark legislation providing the legal framework for the Bitcoin-backed bond on Jan. 11. The Volcano Bond is intended to pay down sovereign debt and fund the construction of the country’s proposed “Bitcoin City.”

The ONBTC said the bond will be issued on the Bitfinex Securities Platform, a trading site for blockchain-based equities and bonds registered in El Salvador.

It signals the beginning of Bitcoin-based capital markets in the country, with the bonds set to last 10 years and pay 6.5% in annual return to holders.

The Volcano Bond has the backing of Paolo Ardoino, CTO of Bitfinex Securities:

"We support the government of El Salvador's commitment to the development of Bitcoin-based capital markets and are excited to be part of their economic transformation. We look forward to the launch of new issuances in the first half of 2024."

Related: Bitcoin-friendly El Salvador can become ‘Singapore of the Americas’ — VanEck adviser

El Salvador recently launched a 241-megawatt Bitcoin mining project worth $1 billion, which will tap into 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.

We found the Volcano Bonds. Will be available soon!!! pic.twitter.com/cUxfhhoCRn

— Bitcoin Beach (@Bitcoinbeach) December 12, 2023

The approval comes nearly 21 months after the country’s former finance minister, Alejandro Zelaya, said the Volcano Bond would launch in mid-March 2022.

Magazine: What it’s actually like to use Bitcoin in El Salvador