Bitcoin bonds in El Salvador after mid-2023, says Bitfinex CTO
Paola Ardoino, Chief Technical Officer of Bitfinex, claimed that El-Salvador is prepared to launch its Bitcoin-backed bonds between June and September this year.
Bitfinex’s CTO clarified that the bonds may not be bonds after all – instead – they could be issued as digital securities. While participating in the Paris Blockblock Week, Paola stated that El-Salvador has already completed the legal process that will help issue the bonds as digital securities.
Although the CTO of Bitfinex in French Capital cited that it is not “clear whether the bonds will come out in the form of shares or in the form of bonds.” The confusion arose because “when the idea of creating the bonds was mooted, interest rates on the United States Treasury were much lower, and this product, the bond, should have generated a return of 7% per year.” Paola states that “right now interest rates are reaching 4.5% and it is difficult to sell these 7% bonds as a product.”
Investors seek to view these “Bitcoin-backed bonds” or “Volcano bonds” as stocks. Paola says that “the feedback we received from potential investors is that they want to see them more like digital shares in 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 $1 billion worth of bitcoin bonds over Bitcoin’s Layer 2 solution, Blockstream’s Liquid Network.
In addition, $1 billion will be taken from the bond issue for the Bitcoin city initiative. President Bukele also said they would provide the following:
- Efficient and sustainable public transport.
- Geothermal energy for the whole city.
- Digital and technological education.
The bond/share will be available on one of the oldest and leading crypto exchanges, Bitfinex founded in 2012 by Raphael Nicolle and Giancarlo Devasini.
El-Salvador became the first in the world to make its flagship cryptocurrency Bitcoin (BTC) legal tender in September 2021. Although some residents remain optimistic, some argue that there is a reason for the president’s ‘unrealistic optimism’.
Amid the market downturn caused by industry-shocking events, such as the TerraUSD collapse and FTX crash, the community believes that the crypto king will shine again, as history dictates.
On March 8, 2023, TheCoinRepublic reported that “El Salvador may soon open a Bitcoin embassy in Texas. This embassy will serve as a hub for any potential crypto-related initiatives that may be put into testing.”
El Salvador chose Texas because it is the second largest state in the United States and an attractive destination for cryptocurrency mining companies due to low electricity prices and favorable climate.
