Per reports on Tuesday, El Salvador’s protracted Bitcoin bonds are finally close to actualization, after receiving regulatory approval for an early 2024 issuance.
According to an announcement on the country’s National Bitcoin Office’s X (formerly Twitter) handle early Tuesday, the Volcano Bond received regulatory approval from the Digital Assets Commission (CNAD) and it is expected to be issued during the first quarter of 2024.
Also, it is confirmed that the bonds are set to be offered on Bitfinex Securities, a trading site for blockchain-based equities and bonds registered in El Salvador. It is also a regulated division of the crypto exchange, Bitfinex.
Additionally, the country’s President, Nayib Bukele confirmed the approval of the Bitcoin Bond on X earlier on Tuesday. He posted “Wen volcano bond?” and reposted several posts that said the bonds would be issued in Q1 2024.
Recall that El Salvador became the first country in the world to pass Bitcoin as a legal tender in 2021. Although the country’s journey in that direction has not been all smooth since then, its president, Nayib Bukele claimed last week that his country is currently not at a loss on its Bitcoin investments.
What to know about El Salvador’s Bitcoin Bond
El Salvador first passed the landmark legislation providing the legal framework for the Bitcoin-backed bond on January 11, 2023. Issuance was initially planned for March 2022 but was postponed several times.
Read also: 2 years after El Salvador’s Bitcoin decision; a lesson for developing countries
However, the digital assets bill was finally introduced in the Legislative Assembly at the end of November 2022, where Bukele’s party, Nuevas Ideas, had a large majority.
The Bitcoin Bond, also called “Volcano bonds”, was announced in 2021 by President Nayib Bukele shortly after he passed the law recognizing Bitcoin as legal tender in the country. Specifically, Bukele’s target was to raise $1 billion via the Bitcoin-backed bonds.
The procedure means seeding a Bitcoin mining industry reliant solely on renewable energy, including that generated by the country’s active volcanoes. In other words, the Volcano Bond is intended to pay down sovereign debt and fund the construction of the country’s proposed “Bitcoin City.”
Bitcoin City is the country’s ambitious Bitcoin mining facility solely run on renewable energy. The first phase of the project will see the construction of a 241-megawatt (MW) mining facility that will comprise 169 MWs of photovoltaic solar energy and 72 MWs of wind power.
The mining farm is being built in El Salvador’s Metapan region, which is close to the Conchagua volcano that is said to power the country’s Bitcoin mining operations.
Now that it has been approved, it signals the beginning of Bitcoin-based capital markets in the country, with the bonds set to last 10 years while paying 6.5% in annual return to holders.
Tether, the company behind the world’s largest stablecoin by market cap, is among the companies investing in the so-called Volcano Energy project that plans to generate electricity from renewable sources to power future Bitcoin mining operations in the Latin American nation.
El Salvador’s Bitcoin Visa
This Bitcoin Bond approval development is the second Bitcoin headline that El Salvador will be making in a few weeks. Last week, El Salvador announced its ‘Freedom VISA’ program.
Related post: El Salvador overtakes Nigeria in global Bitcoin ranking with proposed Bitcoin City
What this entails is the country will be rolling out residency to a maximum of 1,000 people annually who invest at least $1 million worth of Bitcoin or USDT.
This initiative, which can be likened to Switzerland and the United Arab Emirates’ ‘Golden Visa’ gives eligible participants a long-term residency permit and a path to full citizenship in the country.
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