Since 2021, El Salvador President Nayib Bukele has purchased over 3,120 bitcoins for the country’s reserves as a hedge against inflation.
Now, El Salvador’s much anticipated Bitcoin bonds, also known as Volcano Bonds, have received regulatory approval from the nation’s Digital Assets Commission for an early 2024 issuance.
Volcano Bonds Approved For 2024 Launch
El Salvador’s Bitcoin bonds have received approval from the country’s Bitcoin-focused office. The National Bitcoin Office (ONBTC) stated in a Dec. 11 tweet, that it expects the bond to be issued “during the first quarter of 2024.” The bonds will be offered on Bitfinex Securities, a regulated platform of digital asset exchange Bitfinex.
“This is just the beginning for new capital markets on Bitcoin in El Salvador,” the National Bitcoin Office added.
President Nayib Bukele seemingly confirmed the approval in a post of his own on X, saying: “Wen volcano bond?” while also reposting multiple posts noting that the bitcoin-backed bonds would be issued in Q1 2024.
From Legal Tender To Bitcoin Bonds: El Salvador’s Path To Adoption
The possibility of El Salvador issuing the so-called volcano bonds has long been an endeavour for Bitcoin maxi Bukele, who first revealed plans to launch them shortly after the tiny Central American nation adopted the flagship crypto as legal tender in 2021 — a move faced stiff criticism from El Salvador’s political opposition and heavy scepticism from the majority of residents.
The idea at the time was that $1 billion in bonds would be issued in 2022, with half converted to Bitcoin and the other half used to fund infrastructure and BTC mining. The Salvadoran government hoped that the issuance would support building a world-class Bitcoin City — a tax-free enclave for Bitcoin proponents powered by geothermal energy from the county’s active volcanoes.
Notably, the issuance of the volcano bonds has been postponed several times, with El Salvador’s finance minister previously citing unfavorable market conditions and the Russia-Ukraine war as reasons for the delay. However, El Salvador passed the landmark legislation providing the legal framework for the bonds on Jan. 11, 2023.
Suffice it to say that Bukele has blazed ahead with his adoption plans despite criticism from all corners for his bold Bitcoin experiment. El Salvador recently commenced its “Freedom VISA” program, handing out passports and residency to a maximum of 1,000 foreigners annually who invest $1 million worth of bitcoin or tether (USDT) in the country.
