El Salvador’s Bitcoin Bonds Receive Regulatory Approval
El Salvador’s Digital Assets Commission (CNAD) has given the green light to the country’s planned Bitcoin bonds, according to the National Bitcoin Office (ONBTC). The ONBTC expects the bonds to be issued in the first quarter of 2024. President Nayib Bukele retweeted posts confirming the news. The bonds will be issued on the Bitfinex Securities Platform.
The Story Behind El Salvador’s “Volcano Bonds”
President Bukele has long desired to issue Bitcoin bonds since making cryptocurrency legal tender in El Salvador. The original plan was to issue $1 billion in bonds in 2022, with half converted to Bitcoin and the rest used for infrastructure and Bitcoin mining. These “volcano bonds” were intended for the development of a tax-free enclave called “Bitcoin City.” However, their issuance was postponed multiple times due to market volatility and geopolitical tensions. Legislation supporting these Bitcoin-backed bonds was passed in January 2023.
Tensions with the IMF and Bitcoin Investments
The International Monetary Fund (IMF) has been critical of El Salvador’s plans to issue Bitcoin-backed bonds and has urged them to reverse their Bitcoin Law. Despite this, El Salvador has continued to embrace cryptocurrencies, offering a “freedom visa” program that grants residency for investing $1 million in Bitcoin or Tether. The country has also been accumulating Bitcoin as a hedge against inflation, which has proven profitable during recent price rallies.
Hot Take: El Salvador Leads the Way in Crypto Adoption
El Salvador’s approval of Bitcoin bonds demonstrates its commitment to becoming a leader in crypto adoption. By issuing these bonds, the country aims to attract investment and foster capital markets within its borders. This move further solidifies El Salvador’s position as a crypto-friendly nation and sets a precedent for other countries to explore similar initiatives. As the first country to adopt Bitcoin as legal tender, El Salvador continues to push boundaries and embrace the potential of cryptocurrencies.
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