El Salvador’s Volcano-Powered Bitcoin Bond Gets Regulatory Approval
The Digital Assets Commission gave the green light to the Volcano Bond. The bond is set to be issued in the first quarter of 2024.
El Salvador legalized Bitcoin (BTC) as an official form of currency within its borders. The nation is actively developing financial tools that align with and support this policy. Progress has been achieved by the nation in this aspect, as the Digital Asset Committee has approved the release of the inaugural bitcoin (BTC) bonds worldwide.
Bitcoin (BTC) Takes a Fresh Leap in the Salvadoran Financial Market
El Salvador has marked a notable stride in its pursuit of inventive financial tools. In fact, regulatory consent has been given for the release of Bitcoin (BTC) bonds. Similar to the official acceptance of the primary cryptocurrency in the nation, this marks a pioneering occurrence.
As usual, Nayib Bukele, the departing President of El Salvador, announced the news. On X (previously Twitter), the political leader posted details about the upcoming introduction of these bonds, set for the initial quarter of 2024.
“The Digital Assets Commission (CNAD) has granted regulatory approval to the Volcano Bond. We expect the bond to be released in the first three months of 2024. This marks the start of fresh capital markets. #Bitcoin in El Salvador.”
Bitfinex Securities, a regulated section of the renowned cryptocurrency exchange Bitfinex, will facilitate the release of these financial tools known as “Volcano Bonds.” This development has sparked enthusiasm in Nayib Bukele.
He mentioned that regulatory approval had been granted, due to the endorsement from the Digital Asset Committee (CNAD), as also disclosed by National Bitcoin Office of El Salvador.
Background of the “Volcano Bonds”
It’s important to mention that the Volcano Bonds aren’t entirely a fresh initiative. They first originated in November 2021. After the official acceptance of the main cryptocurrency in El Salvador’s monetary system, there were leaks about intentions to release financial tools utilizing the asset.
On January 11, El Salvador initially approved the groundbreaking law establishing the legal structure for the Bitcoin-supported bond. The establishment of this bond is to reduce the national debt and encourage the development of the proposed “Bitcoin City”.
This marks the start of capital markets in the country based on Bitcoin, as the bonds are designed to endure for a decade and provide a 6.5% annual return to investors.
The submission of a digital asset proposal to the Legislative Assembly of El Salvador in November 2022 brought the initiative back for consideration. Following this, the proposal gained substantial backing, resulting in its approval in January 2023.
“We endorse El Salvador’s dedication to building Bitcoin-centered financial markets and are enthusiastic about participating in their economic change. We anticipate the introduction of fresh offerings in the initial half of 2024.”
Bitcoin Mining Venture
El Salvador just initiated a $1 billion Bitcoin mining venture with a capacity of 241 megawatts, leveraging the nation’s volcanic assets in collaboration with Luxor Technology. The mining activities in the country will be fueled by the volcano named Conchagua.
The authorization comes almost 21 months after the previous finance minister of the nation, Alejandro Zelaya, mentioned that the launch of the Volcano Bond was scheduled for the middle of March 2022.
