El Salvador passes a breakthrough crypto bill, clearing the way for Bitcoin-backed bonds.

by Jan 12, 2023CryptoNews0 comments

In addition, the “Digital Asset Issuance” Act would establish a regulatory agency and a legal framework for all digital assets. El Salvador has enacted unprecedented legislation creating the legal foundation for a Bitcoin-backed bond — the “Volcano Bond” — that would pay down the national debt and fund the development of its intended “Bitcoin City.”

The measure was passed on Jan. 11 with 62 votes in favor and 16 votes against, and it will become law if President Bukele ratifies it.

In a Jan. 11 Twitter thread, the National Bitcoin Office of El Salvador announced the bill’s approval and stated that the bonds will be issued soon.

The Volcano Bond — or Volcano Tokens — would let El Salvador generate funds to pay down its sovereign debt, support the development of the Bitcoin City, and create Bitcoin mining infrastructure, according to Bitfinex, the bonds’ technology supplier.

The bonds’ volcanic description is inspired by the country’s Bitcoin City, which is planned to become a sustainable crypto-mining hub fuelled by hydrothermal energy from the nearby Conchagua volcano.

According to Bitfinex, the city would be a special economic zone similar to those found in China, offering tax breaks, crypto-friendly rules, and other incentives to Bitcoin firms for its people.

See also  FTX Crypto Exchange Plans to Restart for International Customers, FTT Token Rises 10%

The bonds are expected to raise $1 billion for the country, with half of the proceeds going toward the construction of the special economic zone.

The tokenized bonds would be issued in US dollars, with a ten-year maturity date and a 6.5% annual interest rate, according to the first plan.

In addition to those released on Bitcoin, the measure provides a legal framework for all digital assets that are not Bitcoin and establishes a new regulatory agency in charge of enforcing securities legislation and protecting against criminal actors.

Recent News

Recent Posts

Disclaimer: The information provided on this website is for informational purposes only. We strive to ensure the accuracy and reliability of the content, but we make no representations or warranties of any kind, express or implied, regarding the completeness, accuracy, reliability, suitability, or availability of the information. The use of this website is solely at your own risk.
We do not endorse or promote any specific cryptocurrencies, projects, exchanges, or investments mentioned on this website. The inclusion of any external links does not imply endorsement or recommendation.
Please note that the cryptocurrency market is highly volatile and involves substantial risks. You should carefully consider your own financial situation and risk tolerance before engaging in any cryptocurrency-related activities.

Related Post


Submit a Comment

Your email address will not be published. Required fields are marked *