El Salvador, famously embracing cryptocurrencies, is set to make another groundbreaking move as it gears up for the launch of its much-anticipated Bitcoin-backed bonds, known colloquially as “Volcano Bonds.” The regulatory green light received by these bonds, anticipated to debut in the early months of 2024, marks a pivotal step for the nation’s financial landscape.
The approval for the Volcano Bonds was granted by El Salvador’s Digital Assets Commission, as revealed in a statement on December 11 by The National Bitcoin Office (ONBTC). This development aligns with earlier speculations, now seemingly confirmed by El Salvador’s pro-Bitcoin leader, Nayib Bukele. Bukele reinforced the news through his own social media post, sparking anticipation with the caption: “Wen volcano bond,” alongside several reposts affirming the issuance in the first quarter of 2024.
The genesis of the Volcano Bonds traces back to November 2021, with their inception solidifying through groundbreaking legislation passed on January 11 by El Salvador. These bonds aim to alleviate sovereign debt and finance the ambitious vision of constructing the nation’s proposed “Bitcoin City.”
Elaborating on the issuance, ONBTC disclosed that the bonds are slated to be available on the Bitfinex Securities Platform. This platform, registered in El Salvador, specializes in trading blockchain-based equities and bonds, signaling a monumental leap towards fostering Bitcoin-centric capital markets within the country.
The forthcoming Volcano Bonds are designed for a decade-long tenure, promising an annual return of 6.5% to its holders, setting the stage for a new chapter in the integration of Bitcoin into traditional financial instruments within El Salvador.
This initiative not only underscores El Salvador’s commitment to pioneering cryptocurrency adoption but also represents a significant milestone in global financial markets, showcasing the emergence of Bitcoin-backed securities as a viable investment avenue.