El Salvador’s “Volcano Bonds” to raise $1 billion for Bitcoin City development to be available between June and September, says Bitfinex CTO

Paolo Ardoino, the CTO of Bitfinex exchange, has announced that the "Volcano Bonds" announced by the government of El Salvador to raise $1 billion for the development of Bitcoin City will be available "between June and September".

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The “Volcano Bonds” announced by the government of El Salvador to raise $1 billion will be available “between June and September”. This was stated by Paolo Ardoino, CTO of the Bitfinex exchange, the company working on this project with the government of the Central American country, led by Nayib Bukele.

Speaking at a panel on bitcoin at the Paris Blockchain Week conference, Ardoino explained that the first steps to issuing El Salvador’s bonds are to approve a law “to allow digital securities” and to create an entity “to regulate these assets.”

The legislation has already been approved, as we reported in January, and is now in the process of establishing the regulatory entities in the matter, said Ardoino.

Bitfinex’s representative in Paris assured that it was not yet clear “whether tokens will be issued as shares or as debt”. This is because “when the idea of creating the bonds was presented, the interest rates of the U.S. Treasury were much lower and this product, the bond, should have generated a return of 7% per year”. However, he says, “now interest rates are reaching 4.5%, and it is difficult to sell these bonds at 7% as a product.

Investors prefer to think of Volcano Bonds as equities, Ardoino said. “The feedback we have had from potential investors is that they would like to see them more as digital shares of an energy company operating in El Salvador or a mining company,” Ardoino added, without specifying whether he was referring to bitcoin mining or mining in general.

The Salvadoran government intends to raise nearly $1 billion through the “volcano bonds.” This money will be used, according to President Bukele’s announcements, for the country to continue its investments in bitcoin (BTC) and in infrastructure for cryptocurrency mining, as well as for the planning of what will be the Bitcoin City announced for 2021.

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