The country plans to use the new asset to raise funds to repay its sovereign debt and develop the bitcoin mining industry using renewable energy.

El Salvador's bonds backed by bitcoin have received regulatory approval and will be issued in early 2024, according to Coindesk, citing social media posts from the country's government offices.

According to the information, the so-called "volcano bonds" have received approval from the Digital Assets Commission (CNAD) and will be issued in the first quarter of 2024. The President of El Salvador, Nayib Bukele, also confirmed the information about the bond launch by reposting several messages on the social network X (formerly Twitter).

These bonds will be placed on Bitfinex Securities, a regulated subsidiary of the Bitfinex cryptocurrency exchange. In April, the same company was granted the first license to provide cryptocurrency services in El Salvador.

President Bukele first announced plans to issue bitcoin-backed bonds in 2021, shortly after he signed a law recognizing bitcoin as legal tender in the country, along with the US dollar. It was originally planned that the bond issue would take place in March 2022, but it was postponed several times.

The law on digital assets adopted at the beginning of this year provided the basis for the issue of vulcan bonds. These bonds will be used, among other things, to repay sovereign debt. In addition, Bukele plans to use them to raise $1 billion and create a bitcoin mining industry using exclusively renewable energy, including energy produced by the country's volcanoes.

In October, together with the mining company Luxor Technology, the first local bitcoin mining pool was launched in El Salvador, which is based on the world's largest renewable energy generation site with a capacity of 241 MW. Among the companies investing in this project is the issuer of Tether stablecoins.

Due to the rise in the bitcoin exchange rate in early December, El Salvador's investments in cryptocurrency brought profit. Last week, the country launched a citizenship program in exchange for bitcoins and USDT.