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El Salvador’s $1bn volcano-powered Bitcoin bonds greenlit for launch in early 2024

El Salvador’s $1bn volcano-powered Bitcoin bonds greenlit for launch in early 2024
El Salvador's president Nayib Bukele is behind the Volcano Bonds, so called because the aim is to use geothermal energy from volcanoes for Bitcoin mining. The proceeds were intended to fund his ambitious “Bitcoin City” project. Credit: Andrés Núñez/DL News.
  • El Salvador has made a huge step forward in releasing its Volcano Bonds.
  • The $1 billion bonds are part of President Nayib Bukele’s plans to build his “Bitcoin City.”

El Salvador is on the cusp of releasing its much-anticipated $1 billion Volcano Bonds, expected in early 2024, following regulatory clearance.

The Central American country’s Bitcoin Office said today that it’s received regulatory approval from the Digital Assets Commission.

“This is just the beginning for new capital markets on Bitcoin in El Salvador,” the Bitcoin Office said today on platform X, formerly Twitter.

President Nayib Bukele announced plans to issue $1 billion in Bitcoin-backed bonds in November 2021.

The government aims to use geothermal energy from volcanoes for Bitcoin mining, and the proceeds were intended to fund his ambitious “Bitcoin City” project.

The launch of the bonds was originally planned for March 2022 with a $100 minimum investment, but it has faced multiple delays since then. The government blamed these delays on various factors, including declining Bitcoin price and regulatory delays.

Now that Bitcoin price is up again and the legislative approval has been cleared, the issuance of Volcano Bonds seems almost imminent — potentially starting as early as next month.

“We anticipate the bond will be issued during the first quarter of 2024,” the Bitcoin Office said.

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Volcano Bonds will trade on centralised crypto exchange Bitfinex’s securities platform, which is licensed in Kazakhstan and El Salvador. Kazakhstan became a major hub in Bitcoin mining after the expulsion of miners from China in the spring of 2021.

Volcano Bonds are one of many Bitcoin initiatives of the country under President Nayib Bukele.

El Salvador made Bitcoin legal tender in 2021 and now also offers a pathway to citizenship to those who invest $1 million in the cryptocurrency.

Volcano Bonds and Bitcoin

Volcano Bonds are denominated in the dollar, but El Salvador plans to allocate half of the proceeds to infrastructure — such as volcano-powered Bitcoin mining, hence the name — and invest the rest in Bitcoin, holding it for five years before selling it over the next five years.

Originally, these bonds were announced to have a maturity date in January 2032 and an annual interest rate of 6.5%. It remains unclear if there will be any alterations to the terms of the bonds as a result of their postponed launch.

In 2002, El Salvador issued a $500 million bond, with a maturity date set for April 2032 — coinciding with the timeline of the Volcano Bonds.

The bond is listed on the Luxembourg Stock Exchange, where it’s currently trading at about 87 to 88 cents on the dollar.

It has a coupon of 8.25% — the interest payment that the bond issuer makes to the bondholder.

That’s higher than Volcano Bonds’ 6.5%. But it bears no relation to Bitcoin.

Ekin Genç is DL News’ Oxford-based Managing Editor. Got a hot tip? Email him at

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