El Salvador is preparing for Bitcoin bonds – government will present 20 bills to lawmakers for regulating cryptocurrency

El Salvador is preparing for Bitcoin bonds – government will present 20 bills to lawmakers for regulating cryptocurrency
El Salvador's Bitcoin BondBI India
  • The El Salvador government is working on legislation to issue $1 billion Bitcoin bonds.
  • In an interview, El Salvador’s Finance Minister said the government wants to provide a “legal structure” for those interested in bitcoin bonds.
  • In September last year, El Salvador became the first country to accept Bitcoin as legal tender.
After creating history by becoming the first nation to adopt Bitcoin as legal tender, El Salvador is now working on legislation that will create a framework to issue $1 billion Bitcoin bonds. In an interview with the local media, El Salvador’s Finance Minister Alejandro Zelaya said that the government has prepared 20 bills that will establish the legal and financial framework for bitcoin bonds. However, there has been no indication of the timeline for this legislation to be submitted further to lawmakers.

[The Bitcoin Bonds] need a regulation, a legal framework because we don’t have a law to issue crypto backed securities, we don’t have a law to oversee exchanges.

Alejandro Zelaya, Finance Minister of El Salvador said in an interview with local media.

First proposed in November 2021, the government is looking to issue Bitcoin bonds worth $1 billion to investors – half of the funds raised would be used to buy Bitcoin, and the other half would be spent on infrastructure. This is expected to fund their ‘Bitcoin City’, which is estimated to cost 300,000 Bitcoin to build.

The bonds would have a term of ten years and carry an annual interest of 6.5 per cent to attract investors. The Bitcoin bonds are expected to be issued through Blockstream, as tokenised bonds on the Liquid network.

Bukele doubles down on Bitcoin!

On Jan 2, El Salvador’s crypto-loving President Nayib Bukele tweeted his top five predictions for 2022 - this included “Volcano bonds getting oversubscribed.”

After making Bitcoin a legal tender in September 2021, President Nayib Bukele has been doubling down on the world’s oldest cryptocurrency. He announced the launch of Bitcoin bonds, also known as Volcano bonds in November last year. El Salvador is also launching the world's first "Bitcoin City," funded by cryptocurrency – to be built next to Conchagua volcano in the southeastern part of the country.

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