El Salvador’s eagerly awaited Bitcoin bonds, colloquially known as “Volcano Bonds,” have received regulatory approval and are slated for launch in early 2024.
The official announcement came via a statement from The National Bitcoin Office (ONBTC) on December 11.
The Digital Assets Commission of El Salvador has granted its endorsement for the Volcano Bond, marking a significant milestone in the country’s crypto journey.
Nayib Bukele, the pro-Bitcoin leader of El Salvador, also lent credibility to the news by sharing a post captioned, “Wen volcano bond,” along with multiple reposts confirming the bond’s issuance in the first quarter of 2024.
The concept of Volcano Bonds first emerged in November 2021 when El Salvador signaled its intent to explore this innovative financial instrument.
Subsequently, on January 11, the country passed groundbreaking legislation that established the legal framework for Bitcoin-backed bonds.
The primary objectives of the Volcano Bond are to address sovereign debt obligations and finance the development of “Bitcoin City,” an ambitious project aimed at embracing cryptocurrency technology.
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The ONBTC disclosed that the bond issuance will take place on the Bitfinex Securities Platform, a trading platform dedicated to blockchain-based equities and bonds, registered within El Salvador.
This marks the inception of Bitcoin-based capital markets within the country.
Investors can anticipate a ten-year tenure for the bonds, offering an annual yield of 6.5%.
El Salvador has recently embarked on a substantial Bitcoin mining initiative valued at $1 billion, which harnesses the nation’s volcanic resources. Luxor Technology is a key partner in this venture, and the mining operations will be powered by the Conchagua volcano.
It is worth noting that the approval of the Volcano Bond comes nearly 21 months after the initial announcement by Alejandro Zelaya, the former finance minister of El Salvador, who had previously projected a mid-March 2022 launch date.
The regulatory green light signifies the government’s continued commitment to integrating cryptocurrencies into its financial infrastructure, showcasing the nation’s determination to be at the forefront of the crypto revolution.
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