Michael Saylor called El Salvador’s “volcanic bonds” a hybrid instrument of domestic debt

Microstrategy head explained market unwillingness for bitcoin bonds

02.04.2022 - 11:00


1 min

What’s new? The financial markets are not ready for bitcoin bonds, MicroStrategy founder Michael Saylor stated in an interview for Bloomberg. He said he would like to see the day when people start using bitcoin bonds similar to mortgage-backed securities.

Bloomberg’s material

What else did Saylor say? The CEO of MicroStrategy mentioned the El Salvador government’s plans to sell about $1 billion worth of “volcano bonds” that will be backed by bitcoins. Saylor called them a hybrid sovereign debt instrument rather than government securities. This instrument has credit risk and has nothing to do with the risks specific to bitcoins, the MicroStrategy chief insists.

What preceded it? Michael Saylor believes that getting a loan secured against bitcoins is a better financing option than launching bitcoin bonds. MicroStrategy’s unit, therefore, received a $205 million loan from Silvergate Bank to buy bitcoins.

Earlier it was reported that El Salvador is finalizing preparations for the issuance of bitcoin bonds. The oversubscription of the securities will amount to at least $500 million, the country’s Finance Minister Alejandro Zelaya expects.

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