El Salvador prepares 20 bills to provide a legal framework for Bitcoin bonds

The Salvadoran government, led by President Nayib Bukele, has advanced its plan to issue bitcoin bonds by preparing 20 bills designed to provide a legal framework for it.

Finance Minister Alejandra Celaya told Salva Multimedia world January 4, bill Will cover regulations regarding the issuance of securities as cryptocurrencies to ensure The viability of Bitcoin bonds Proposed in November 2021. He said:

“[This is] Provide legal structure and legal certainty for everyone who buys Bitcoin bonds. ”

However, he did not propose a timetable for submitting the legislation to legislators.

The $1 billion sought by the bond issuance will be used to fund Bitcoin City Initiative President Bukele promised to provide “digital and technical education, geothermal energy throughout the city, and efficient and sustainable public transportation.”

One of the characteristics of Bitcoin City is Bitcoin (Bitcoin) Mining operations that use geothermal energy generated by volcanoes to power mining equipment-resulting in bonds being called “volcano bonds.”mining Operation The first batch of 0.00599179 Bitcoin was mined on October 1, 2021.

Funds from the bond issuance can also be used to repay the US$800 million Eurobond due in January 2023. Zelaya told El Mundo that the country needs to find financiers to help them meet the obligations of repaying European bonds that may arise from Bitcoin bonds or “institutional offers from various investment banks” rather than another European bond issuance.

“We can simply pay, without creating another Eurobond in the traditional market. We can find a bond denominated in U.S. dollars and paid in Bitcoin.”

Eurobonds are debt instruments used by countries to raise funds in denominations other than their national currencies.

Zelaya also stated that investors are very interested in Bitcoin bonds because it provides exposure to BTC and a 10-year 6.5% interest.

related: President Bukele predicts that Bitcoin will rebound to $100,000, further legal adoption, etc.

However, the issuance of Bitcoin bonds will not prevent this Central American country from participating in traditional finance. Celaya said: “We will not abandon the traditional market.”

El Salvador’s well-known partners in creating volcano bonds include blockchain developers Blockstream and iFinex, the latter of which is closely related to the stable currency Tether (USDT). These bonds are expected to be issued on Blockstream’s Liquid Network and processed by iFinex.

President Bukele issued his forecast for 2022 on January 2, stating that “Bitcoin City will begin construction” and “Volcano Bonds will be oversubscribed.”

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