- 1 Bitfinex exchange is the trading partner of ‘Volcano bonds’ or Bitcoin Bonds.
- 2 El-Salvador will likely launch Bitcoin-backed bonds by the end of Q2 of 2023.
- 3 El Salvador is planning to establish a Bitcoin Embassy in Texas.
Paola Ardoino, Chief Technical Officer of Bitfinex, asserted that El-Salvador is prepared to launch its Bitcoin-backed bonds between June- September this year.
Bitfinex’s CTO clarified that the bonds might not be the bonds after all– in place of this– they could be issued as digital securities. While participating in Paris Blockblock Week, Paola stated that El-Salvador has already completed the law process that will help issue the bonds as digital securities.
Although the CTO of Bitfinex in French Capital quoted that it is not “clear if the bonds will come out in the form of shares or the form of bonds.” The confusion arose because “when the idea of creating the bonds was put forward, US Treasury interest rates were much lower, and this product, the bond, should have generated a return of 7% per year.” Paola vocalizes that “right now interest rates are reaching 4.5%, and it’s hard to sell those 7% bonds as a product.”
Investors seek to see these “Bitcoin-backed bonds” or “Volcano bonds” as shares. Paola says that “the feedback we got from potential investors is that they would like to see them more like digital shares of an energy company operating in El Salvador or a mining company,” moreover, he did not specify whether he was referring to Bitcoin mining or mining in general.
Primarily the plan was first announced in November 2021 to issue bitcoin bonds worth 1 billion USD over the layer 2 solutions of Bitcoin, Blockstream’s Liquid Network.
Also, $1 billion will be taken from the bond issuance for the Bitcoin city initiative. President Bukele also said they would provide the following:
- Efficient and sustainable public transport.
- Geothermal energy for the entire city.
- Digital and technological education.
The bond/share will be available at one of the oldest and leading crypto exchanges, Bitfinex was founded in 2012 by Raphael Nicolle and Giancarlo Devasini.
El-Salvador became the first in the world to make the flagship cryptocurrency Bitcoin (BTC) legal tender in September 2021. Although some citizens remain optimistic, some claim it is a shallow ‘unrealistic optimism’ of the President.
Amid the market downturns caused by industry-shocking events, such as the TerraUSD collapse and the FTX crash, the community believes that the crypto-king will shine again, as its history suggests.
On March 8, 2023, TheCoinRepublic reported that “El Salvador may soon open a Bitcoin Embassy in Texas. This embassy would serve as a hub for all potential crypto-related initiatives that might be put into testing.”
El Salvador opted for Texas because it is the second-largest state in the US and an attractive destination for cryptocurrency mining firms due to its low electricity prices and favorable climate.