El Salvador’s Bitcoin Bonds Get Regulatory Approval, Launch Set for Early 2024

Last updated: December 12, 2023 01:04 EST
. 2 min read

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El Salvador’s highly anticipated Bitcoin (BTC) bonds, also known as “Volcano Bonds,” have received the regulatory approval for an early 2024 issuance.

The bonds are expected to be offered on Bitfinex Securities, a regulated division of the popular cryptocurrency exchange Bitfinex.

“The Volcano Bond has just received regulatory approval from the Digital Assets Commission (CNAD),” El Salvador’s National Bitcoin Office shared the news on their official X profile, said.

“We anticipate the bond will be issued during the first quarter of 2024. This is just the beginning for new capital markets on Bitcoin in El Salvador.”

President Nayib Bukele, who has been a strong advocate for Bitcoin adoption in El Salvador, seemingly confirmed the approval on social media platform X.

He posted, “Wen volcano bond?” (sic) early Tuesday and shared several posts reiterating that the bonds would be issued in Q1 2024.

Wen volcano bond? 🥺

— Nayib Bukele (@nayibbukele) December 12, 2023

Volcano Bonds Expected to Raise $1 Billion

The concept of “Volcano bonds” was introduced by President Bukele in 2021, shortly after El Salvador passed a law recognizing Bitcoin as legal tender in the country.

The aim was to raise $1 billion through these bonds, with the intention of supporting a Bitcoin mining industry powered entirely by renewable energy, including that generated by the country’s active volcanoes.

Originally scheduled for issuance in March 2022, the launch of the Bitcoin bonds faced multiple delays.

However, progress was made when the digital assets bill was finally introduced in the Legislative Assembly in November 2022, where President Bukele’s party, Nuevas Ideas, holds a significant majority.

The bill received 62 votes in favor, with 16 votes against, and was ultimately passed in January 2023.

This comes on the heels of another significant Bitcoin-focused initiative by El Salvador.

The country recently launched its “Freedom VISA” program, offering residency to a maximum of 1,000 individuals annually who invest at least $1 million worth of Bitcoin or tether (USDT) stablecoins.

El Salvador’s Bitcoin Bet Starts to Pay Off

El Salvador’s Bitcoin investment has turned green.

Data from Nayibtracker.com, which tracks the country’s Bitcoin purchases based on Bukele’s tweets, shows that El Salvador would walk away with roughly $4 million in profit if it decided to sell its holdings.

Aside from El Salvador, some other big investors in the cryptocurrency have also seen their profit reach billions.

MicroStrategy, one of the largest institutional holders of Bitcoin, has seen its unrealized profit soar to $2 billion.

With Bitcoin reaching $42,000, the value of MicroStrategy’s holdings rose to approximately $7.3 billion, resulting in a profit exceeding $2 billion.

Likewise, Tether, the company behind the world’s largest stablecoin, has witnessed a significant increase in the value of its Bitcoin reserves, surpassing $1 billion in profit.

Tether currently holds 57,576 BTC, with an average purchase price of $22,480 per coin, meaning the company’s holdings have gained around 85%, or $1.1 billion, since its acquisition.