Are El Salvador’s Bitcoin ‘Volcano Bonds’ an End Run Around the IMF?

The Breakdown

Blockworks

Investing, Business

4.8 • 806 Ratings

🗓️ 23 November 2021

⏱️ 17 minutes

🔗️ Recording | iTunes | RSS

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Summary

This episode is sponsored by NYDIG. Today on “The Breakdown,” a check in on El Salvador, where President Nayib Bukele has just announced “Bitcoin City,” a new community that will feature no income or capital gains tax and be designed to attract talent from around the world. The effort is being funded in part by a $1 billion bond that some are calling the “Volcano Bond.” The bond will be tokenized by Blockstream on Liquid and available for trade on Bitfinex. NLW covers the bitcoin world’s reaction to the news (as well as some fintwit skepticism). NYDIG, the institutional-grade platform for bitcoin, is making it possible for thousands of banks who have trusted relationships with hundreds of millions of customers, to offer Bitcoin. Learn more at NYDIG.com/NLW. Enjoying this content? SUBSCRIBE to the Podcast Apple: https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M= Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell, research by Scott Hill and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Dark Crazed Cap” by Isaac Joel. Image credit: Jaime Mejia/iStock/Getty Images Plus, modified by CoinDesk.

Transcript

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0:00.0	Welcome back to The Breakdown with me, NLW.
0:09.1	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:16.3	The breakdown is sponsored by Nidig and produced and distributed by CoinDes.
0:22.6	What's going on, guys? It is Monday, November 22nd, and today we are talking about El Salvador, Bitcoin bonds, volcano bonds, and geo-strategic intrigue.
0:34.3	But first, I just wanted to give you guys an expectation around the holiday schedule.
0:39.6	So obviously in the U.S., the Thanksgiving holiday is coming up, and I'll be doing a series of short
0:44.6	interviews for the days surrounding the holiday. Those will kick in, I think, on Wednesday and run
0:50.9	through the weekend before coming back to our normal schedule next week.
0:55.0	I love using these holidays as ways to catch up on people's takes and opinions on things that
0:59.4	have happened over the last however long it's been since I've had a chance to talk with
1:03.0	them. So I hope you enjoy that. I am pretty sure that you will. I've got some great guests
1:07.0	coming. But today, as I mentioned, we are talking El Salvador. And I want to start
1:12.6	with the headline that is blasted all over the internet today. On CoinDesk, El Salvador to create
1:18.4	Bitcoin City. Use 500 million of planned $1 billion bond offering to buy more crypto. From Bloomberg,
1:24.9	El Salvador plans tokenized Bitcoin bonds and tax-free Bitcoin City. From the
1:29.7	block, El Salvador government strikes deal with Bitfinex and Blockstream to issue $1 billion
1:34.0	Bitcoin bond. Sounds pretty big, right? Well, it's interesting on multiple geopolitical levels,
1:40.7	but first, let's do a little bit of background and catch up on what's been
1:44.5	happening in El Salvador this year. In case you somehow missed it, at the end of May,
1:50.4	President Naip Buceli of El Salvador announces that he would be proposing a law to make Bitcoin
1:55.9	legal tender. He did this at the Bitcoin conference in Miami after being introduced virtually by Jack
2:01.7	Mallors of Strike. A few days later, in June, the legislator voted it through. El Salvador was set
	...

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