They had been due to launch in March 2022 — but their rollout has been repeatedly delayed after BTC's value plummeted during a punishing bear market.
Listen to the CoinMarketRecap podcast on Apple Podcasts, Spotify and Google Podcasts
El Salvador has passed a new law that will pave the way for long-awaited "Volcano Bonds" to hit the market.
President Nayib Bukele has long desired to release Bitcoin-backed bonds ever since making the world's biggest cryptocurrency legal tender in September 2021.
They had been due to launch in March 2022 — but their rollout has been repeatedly delayed after BTC's value plummeted during a punishing bear market.
The idea is to raise $1 billion, with half of the sum invested into Bitcoin and the other half spent on infrastructure.
This would include ambitious plans to build "Bitcoin City" — a metropolis that would sit at the base of a volcano in the Central American country.
During a rally that coincided with the peak of the bull run, where BTC was sitting at $68,000, Bukele said everything from restaurants to museums in the city would be devoted to Bitcoin.
In El Salvador's legislative assembly, 62 politicians voted in favor of the new legislation, while 16 were against.
On Twitter, the country's Bitcoin Office described it as a "landmark" law that will pave the way for Volcano Bonds to be issued very soon — declaring:
"El Salvador is the epicenter of Bitcoin adoption, and thus, economic freedom, financial sovereignty, censorship resistance and unconfiscatable wealth."
It's also hoped that the arrival of the digital securities law will deliver "unprecedented consumer protection from bad actors in the 'crypto' space while also firmly establishing that we are open for business to all those who wish to build the future with us on Bitcoin."
Finishing off with a tweet that indicates Bukele remains as bullish as ever, the Bitcoin Office added:
"Under President Bukele, El Salvador has become not only the safest country in Latin America, but now also the country with the strongest protection of a person's rights to economic freedom, sovereignty and prosperity."
Last year, there had been fears that demand for Volcano Bonds had dried up altogether, potentially leaving the project dead in the water.
But you could argue that the current climate is a much better time to launch a Bitcoin-backed bond, especially from El Salvador's perspective.
BTC tends to be governed in four-year cycles, with bullish momentum typically building towards the halving — where block rewards for miners are slashed by 50%.
This is next scheduled to take place in April 2024, and during past cycles, has been a key catalyst for the commencement of a bull run.
Launching Volcano Bonds during the depths of the bear market could lead to substantial gains for El Salvador's investment if history repeats itself — something that Bukele could sell as a big win to voters.
