On December 12th, El Salvador’s Bitcoin Office announced that the “Volcano Bond,” a Bitcoin-backed bond, has received approval from the National Digital Asset Council (CNAD). The official launch of the world’s first Bitcoin bond in El Salvador is expected to take place in the first quarter of 2024.
In their announcement, The Bitcoin Office expressed excitement about this development, considering it as just the beginning of attracting new capital into Bitcoin in El Salvador.
El Salvador plans to issue a billion-dollar Bitcoin bond and has ambitious plans to build a “Bitcoin City” based on Bitcoin mining powered by renewable energy from volcanoes.
Regarding the Bitcoin “Volcano Bond,” President Nayib Bukele first announced it in November 2021. By early 2023, El Salvador’s Legislative Assembly had passed the law allowing the issuance of digital assets, paving the way for the country’s Bitcoin bond plans.
However, this plan faced significant scrutiny as experts raised concerns about the country’s high public debt. In reality, it was put on hold throughout 2022 due to legal hurdles and the challenging crypto market conditions at the time.
Furthermore, opposition within the Salvadoran government argued that legitimizing crypto assets could facilitate illegal activities such as money laundering, tax evasion, and increased accumulated debt.
Despite these challenges, El Salvador has achieved several milestones in the cryptocurrency space by becoming the first country to recognize Bitcoin as legal tender. At present, El Salvador holds 2,770 BTC, equivalent to around $115 million USD.
This development reflects El Salvador’s ongoing efforts to integrate cryptocurrencies into its economy and finance.