Discussion on the Volcano Bonds, a series of digital debt instruments that would be used to finance the creation of Bitcoin City, has resurfaced after their regulatory approval in El Salvador. The Bitcoin Office in the country revealed that it anticipated a launch date of Q1 2024 for these bonds.
Volcano Bonds Might Be Issued in Q1 2024
The Salvadoran Volcano Bonds might be launched next year, according to the National Bitcoin Office. The institution, created by President Nayib Bukele last year to manage and oversee bitcoin projects in the country, reported the approval of the regulation that will support the issuance of these bonds.
It stated:
The Volcano Bond has just received regulatory approval from the Digital Assets Commission (CNAD). This is just the beginning for new capital markets on bitcoin in El Salvador.
Furthermore, the office anticipates that the launch of these instruments will happen during Q1 2024. Stacy Herbert, director of the Bitcoin office, stated that they were currently working on determining the size of the bond offer, which is expected to reach $1bn.
In an interview with El Salvador, a local newspaper, Herbert explained:
Our interest is to develop new capital markets in bitcoin and the issuance of the first sovereign bond backed by bitcoin will help us achieve this.
The bonds will be issued through Bitfinex Securities, a company that received approval as a digital assets service provider in the country and will reportedly use Blockstream’s Liquid network. Bukele first revealed the Volcano bonds in 2021 when he announced the construction of the so-called Bitcoin City, which would be financed with funds from these bonds.
However, their issuance has been delayed for several reasons, including the lack of a regulatory framework for digital securities in El Salvador. In September 2022, Bitfinex CTO Paolo Ardoino acknowledged this issue, revealing that the company would take two or three months more to have everything prepared after the approval of this law.
What do you think about the Volcano Bonds and their upcoming launch? Tell us in the comments section below.
