El Salvador’s Bitcoin Volcano Bond has finally been approved after nearly two years of delays and is expected to be issued as early as the first quarter of 2024. The country’s National Bitcoin Office, ONBTC, announced on Tuesday that the Digital Assets Commission had given the green light for the bond issuance, marking a significant milestone for new capital markets on Bitcoin in El Salvador. The bond is set to be issued on the Bitfinex Securities Platform.
President Nayib Bukele also confirmed the news, retweeting several stories and posting about the approval. This development comes after previous attempts to issue the bond had stalled. Named after a plan to use geothermal energy from a volcano to power Bitcoin mining, the Volcano Bond was first announced in 2021 shortly after El Salvador adopted Bitcoin as legal tender.
Despite previous postponements and delays, the bond is now on track for issuance in 2024 after the approval by the country’s Digital Assets Commission. If successful, the bond could help El Salvador avoid defaulting on its debt, a significant concern given the country’s reliance on Bitcoin as legal currency. Additionally, the nation is seeking new revenue by offering citizenship to investors who spend $1 million on Bitcoin.
The Volcano Bond is a key project for Bukele, who spearheaded the efforts to designate Bitcoin as legal tender. The funds raised by the bond are earmarked for the creation of a “Bitcoin city” and for investments in Bitcoin itself. Despite criticism from the International Monetary Fund, El Salvador’s current holdings in Bitcoin, according to Bukele, are now profitable.
Historically, the bond’s scheduled debut in early 2022 was postponed and temporarily sidelined due to fluctuations in crypto prices. However, El Salvador’s congress passed a law in January to create a legal framework for the bond, signaling the government’s commitment to the initiative.
In light of these recent developments, the price of Bitcoin has seen fluctuations, reaching a high last week before retreating to around $41,300 as of Tuesday morning. The approval of the Bitcoin Volcano Bond is a significant step for El Salvador’s ambitious Bitcoin-related initiatives and underscores the country’s commitment to becoming a leader in the digital currency space.
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