Regulatory Nod and Anticipated Launch
El Salvador has received regulatory approval to introduce the world’s first Bitcoin Bonds, also known as “Volcano Bonds.” The Digital Assets Commission (CNAD) granted approval, and the bonds are set to launch in the first quarter of 2024.
The announcement was made on X.com (formerly Twitter) by the National Bitcoin Office. They stated, “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.”
Leadership Confirmation
President Nayib Bukele confirmed the news by retweeting, stating that the Bitcoin Bonds would be issued in the first quarter of 2024. The bonds will be issued on the Bitfinex Securities Platform, a trading site registered in El Salvador. This development is a significant step towards establishing Bitcoin-centered capital markets in the country.
Volcano Bonds: A Vision Originating in 2021
The concept of Volcano Bonds was introduced by President Bukele in 2021 after recognizing Bitcoin as legal tender. The bonds aim to raise $1 billion to finance the Bitcoin City project and alleviate sovereign debt. The funds will be used to develop a Bitcoin mining industry powered by renewable energy from volcanoes in El Salvador.
Long-Awaited Approval
The regulatory approval comes after nearly 21 months since the initial announcement. Former Finance Minister Alejandro Zelaya had projected a mid-March 2022 launch, but there were delays. The digital assets bill was introduced in the Legislative Assembly in late November 2022, leading to the approval.
With the approval secured, El Salvador is on the verge of introducing Bitcoin-based capital markets. The Volcano Bonds will provide a 6.5% annual return to bondholders and will mature over a decade.
Bitcoin Thrives in El Salvador
El Salvador’s Bitcoin ventures extend beyond bonds. The country launched a $1 billion Bitcoin mining project powered by volcanoes, generating 241 megawatts of power. This initiative, in partnership with Luxor Technology, showcases the potential synergy between Bitcoin adoption and economic growth.
President Bukele’s heavy Bitcoin bet has paid off, with Bitcoin crossing the $40,000 mark. This success demonstrates the country’s belief in Bitcoin and its potential for economic development.
Hot Take: El Salvador Introduces World’s First Bitcoin Bonds
El Salvador has achieved a historic milestone by receiving regulatory approval to introduce the world’s first Bitcoin Bonds. This move solidifies the country’s support for Bitcoin and its commitment to establishing Bitcoin-centered capital markets. The Volcano Bonds, set to launch in the first quarter of 2024, will offer investors a 6.5% annual return over a period of ten years. This groundbreaking financial instrument aims to raise $1 billion to finance the Bitcoin City project and alleviate sovereign debt. El Salvador’s foray into Bitcoin extends beyond the bonds, with the country also launching a major Bitcoin mining project powered by its abundant volcanic resources. This bold Bitcoin bet has proven successful, highlighting the potential economic growth that can be achieved through Bitcoin adoption.
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