El Salvador regulator approves bitcoin bonds issuance in early 2024
The project has been delayed at least four times since it was first announced last March
12.12.2023 - 09:15
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What’s new? El Salvador’s Digital Assets Commission approved the issuance of Volcano Bonds bitcoin bonds. The National Bitcoin Office (ONBTC), which was established late last year to manage government crypto projects, expects the securities to be issued in Q1 2024. The project was first announced almost two years ago but has been delayed several times since then.
What else is known? El Salvador’s President Nayib Bukele first announced the issuance of bitcoin bonds in November 2021, two months after the country recognized bitcoin as legal tender.
The project raised $1 billion from investors, with half of the amount to be used to fund infrastructure for mining and the other half to buy bitcoin. Bitfinex, an exchange affiliated with Tether, the issuer of the USDT stablecoin, was chosen as the sole exchange service provider. Both companies have already realized several joint projects with the government of El Salvador.
The securities were expected to be issued on Blockstream’s Liquid Network sidechain, with Bitfinex Securities, a tokenized securities trading platform, handling the settlement of the issue. The Ministry of Finance claimed that the bonds would comply with all financial market regulations, including customer identification (KYC). The coupon rate was to be 6,5% per annum and the bonds were to mature in 2032.
The issue was scheduled for early 2022, then postponed to mid-March, and then delayed indefinitely due to the falling bitcoin price.
This year, the country’s authorities launched a $1 billion volcanic energy mining farm in partnership with Luxor Technology. One of the investors was Tether.
In addition, El Salvador, together with Tether, launched a visa program that will allow one to qualify for citizenship of the country for crypto investments of $1 million. Only bitcoins and USDT are accepted, and up to a thousand participants are allowed per year, not including their spouses and children.
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