In September of last year, the announcement of a so-called ‘Volcano Bond’ by the government of El Salvador captured lots of attention. Basically it is a sovereign ‘energy-backed’ bond in the amount of $1 billion, with half of the raise used to buy Bitcoin, and the rest funding the geothermal-powered ‘Bitcoin City’, designed by Fernando Romero Enterprise and planned to be built in La Union along with the new airport and the ‘train of the pacific‘ near the slopes of the Conchagua volcano, overlooking the stunning Gulf of Fonseca.

The tax benefits of Bitcoin City, El Salvador
The tax benefits of Bitcoin City, El Salvador


At a beach party hosted by President Nayib Bukele, several details were proposed:

Total notional value: US$1,000,000,000 
Coupon: 6.50% 
Use of funds: 1/2 infrastructure build, 1/2 Bitcoin purchase
Duration: 10 years
Maturation: 2032
Interest on the notes: Payable annually in January
Bitcoin lock-up: 5 years
Bitcoin distribution: 50% of proceeds paid after recovery of initial investment
Interest on Bitcoin: Payable each January post recovery
Bookrunner / Trading Venue: Bitfinex Securities
Issuance protocol: Liquid Network
Issuer: El Salvador
Funding currencies: USD, USDT, BTC
Minimum subscription amount: US$100
Nominal value: US$100 (one unit of EBB1 is $100)
Citizenship by investment qualifications: Investments >= US$100,000 qualify investors for ‘citizenship-by-investment’ applications after five years

Bitcoin Bond Details
Bitcoin Bond Details

QUICK LISTEN (1 minute)


Samson Mow Discusses Volcano Bonds with Stephan Livera
Click to listen to Samson Mow Discuss Volcano Bonds with Stephan Livera


Paolo Ardoino Discusses Volcano Bonds on Brave New Coin Podcast
Click to listen to Paolo Ardoino Discuss Volcano Bonds

We are waiting for the final announcement that hopefully clarifies the details of this program by establishing the legal framework for issuing and managing the bond. The legislative assembly earlier this year passed several new securities laws to account for the new technology necessary to implement this program, including recognizing issued assets on the Liquid Network, a ‘layer-2’ for the Bitcoin Network created by financial-services firm Blockstream, and managed by a consortium of interests. Some of the additional use cases for these new regulations include representing shares in a Salvadoran company with Liquid Tokens, or even using these tokens to represent certificates of ownership in real world assets like real estate. Enjoying legal recognition and protections of fractionalized assets is a reality in El Salvador, thanks to these new rules.

The Proposed Rules on Digital Assets (Español)
The Proposed Rules on Digital Assets (English)

As you might have heard, El Salvador has recently become the headquarters of the Regional Stock Market, as Executive President of the Central American Bank for Economic Integration (CABEI), Dante Mossi recently explained, “I salute El Salvador for being the land of hard work, and it is reflected in the intense activity in this CABEI mission. Thank you very much to our Governor, Alejandro Zelaya, and President Nayib Bukele, for their leadership of this worthy nation“. Minister Zelaya followed by saying, “The Central American Bank will have $150 million available to promote the project, which will be invested throughout the region. Today we start with the first step, but it can only be successful if we fully integrate as a region (emphasis added). It is good that El Salvador is the one that sponsors this first step, and we count on the fact that we will have the determined company of the other countries in the region, so that they can take, together with us, these steps that are so important for Central America“.

When you add up all the pieces, what you have is a regional stock market where companies can issue shares in the form of digital assets on Liquid, that can be ultimately settled to Bitcoin – meaning that the recognition of Bitcoin as at least a legitimate financial instrument, and likely as legal tender should be uniform throughout the region in short order.  Moreover, digital assets are poised to become commonplace among the investor class throughout Latin America and the world. You can even get ready to try it out yourself by forming a Salvadoran company and issuing shares and assets via Liquid Tokens!

In order to purchase the bond, you’ll need to register with Bitfinex Securities.


Can I buy the Volcano Bond with Bitcoin?     Yes.
Can I apply for residency if I buy >=US$100,000 of the Bond?     Yes.
Can I apply for citizenship by investment after five years of owning the bond?     Yes.
I don’t have $100k, can I still participate?     Yes, you can buy the bond in increments of $100.

Other articles referencing these plans:
(for the opposing view)
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