Several countries are adopting cryptocurrency, who is the next? Samson Mow

El Salvador plans to release a Bitcoin-backed “Volcano Bond”. The country already uses Bitcoin as a legal tender, and other southern countries are expected to follow suit.

It says Samson Mow, CEO of JAN3. Mow, who helped design the Volcano Bonds, spoke with David Lin, presenter and producer for Kitco News.

“The volcano bond is structured much like a traditional bond, except that it is backed by Bitcoin,” Mow said. “So the proposal that El Salvador is running with is a $ 1 billion bond increase with … $ 500 million in bitcoin purchases … So after a five-year period or a five-year freeze year, they will start selling some of the bitcoin, they have bought, quarter by quarter.And Bitcoin appreciation will be shared with bondholders.The remaining $ 500 million, and that is why it is called Volcano Bond, will be invested in geothermal energy infrastructure and Bitcoin mining.And the design of the bonds is for a coupon of 6.5% .And of course you will eventually get your principal back.

The Volcano mark-to-market bond has not yet been launched and is currently awaiting legal and regulatory approval. However, El Salvador’s finance minister said it was already oversubscribed by about $ 500 million. According to Mow, it was primarily bitcoin whales that showed interest.

In addition to El Salvador, the Central African Republic recently announced that it is taking Bitcoin. Panama will soon adopt Bitcoin. Mow says a nationwide adoption of Bitcoin is “inevitable.”

However, there is criticism of Bitcoin as a legal tender, including the IMF and much of the “legacy financial system”.

“I think it shakes a lot of what they’ve built,” Mow said. “The systems that are in place now … cement the power of Western nations, and they certainly do not like it when the global south begins to rise up and throw off the shackles.”

Mow believes that while the United States is struggling with its economy, developing countries will seek to escape the American sphere of influence through assets like Bitcoin.

He is not convinced that Bitcoin’s volatility makes it a problem for government bonds.

“I think the concept of Bitcoin volatility is very mainstream media … narrative,” Mow explained. “If you look at Bitcoin over a four-year horizon, if you look at the four-year moving average, it has never gone down. So the problem is that people look at bitcoin as if it were a stock … [But] Bitcoin’s value proposition is long-term.

Mow believes that developing countries are adopting Bitcoin “out of necessity” and that it will take some time for the rich countries to catch up. He named Canada in particular.

“I do not think … Canadians generally realize that we need bitcoin,” he said. “But we actually do … We’ve sold all our gold reserves in the last two decades.”

Mow commented on the Canadian government’s freeze on financial transactions during the Freedom Convoy protests in Ottawa.

“It’s a lesson to the people that if you give control of your money to the government, then it’s not your money anymore. But it’s in a way an advertisement for Bitcoin … And I hope that advertisement will give us opportunity to change the Government of Canada in a few years [then] we want a government that understands fiscal responsibility, understands money and understands bitcoin, “he said.

To learn about Mow’s concerns about central banks’ digital currencies (CBDCs) and his long-term outlook for Bitcoin adoption, watch the video above.

Follow David Lin on Twitter: @davidlin_TV


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