El Salvador To Issue First Bitcoin Bonds in Q1 2024
El Salvador has received approval from the nation’s Digital Assets Commission to issue the world’s first Bitcoin bonds in the first quarter of next year. The National Bitcoin Office (ONBTC) confirmed the news, stating that the launch of these bonds will establish a new capital market based on Bitcoin in the country.
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
These Bitcoin bonds, offered by Bitfinex Securities, will have a duration of ten years and offer a 6.5% annual return. President Nayib Bukele, a strong supporter of Bitcoin, expressed his excitement with a tweet saying, “wen volcano bond.”
Bitcoin Bonds Proceeds To Fund “Bitcoin City”
President Bukele initially announced these Bitcoin bonds in 2021, intending to raise $1 billion to finance the construction of a “Bitcoin City” powered by the country’s volcanoes. The bond issuance was initially planned for March 2022 but was delayed. In November 2022, the introduction of a digital assets bill opened the way for these bonds.
Besides issuing Bitcoin bonds, El Salvador is already utilizing its volcanic resources for Bitcoin mining. The country recently partnered with Luxor Technology to establish a 241-megawatt Bitcoin mining project worth $1 billion.
This announcement follows El Salvador’s recent launch of a Freedom Visa program targeting crypto investors who invest at least $1 million in Bitcoin or USDT in the country.
Hot Take: El Salvador Pioneers Bitcoin-Based Capital Market
El Salvador’s approval to issue Bitcoin bonds marks a significant milestone in the adoption and integration of cryptocurrencies into traditional financial systems. By establishing a Bitcoin-based capital market, the country is embracing the potential of blockchain technology and positioning itself as a crypto-forward nation. The issuance of these bonds also demonstrates El Salvador’s commitment to utilizing its natural resources, such as volcanoes, to drive economic growth and innovation. It will be interesting to see how these Bitcoin bonds perform and whether they will encourage other countries to explore similar avenues for integrating cryptocurrencies into their financial ecosystems.
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