El Salvador’s bitcoin – backed “volcano bonds” are expected to raise $1 billion for the government.
Amid the crypto market downturn, El Salvador finally made a decisive step to the realization of its ambitious “Bitcoin bonds” project. The Minister of the Economy, Maria Luisa Hayem Brevé, introduced a bill confirming the government’s plan to raise $1 billion and invest them into the construction of a “Bitcoin city.”
El Salvador spokesperson released a copy of the 33-page legislation, which calls for a digital-assets commission and a Bitcoin Fund Management Agency to oversee crypto-related debt sales.
“Digital securities law will enable El Salvador to be the financial center of central and south America,” wrote Paolo Ardoino, CTO of cryptocurrency exchange Bitfinex, on Twitter.
Bitfinex is set to be granted a license in order to be able to process and list the bond issuance in El Salvador.
The bonds will pay a 6.5% yield and enable fast-tracked citizenship for investors. The government will share half the additional gains with investors as a Bitcoin Dividend once the original $500 million has been monetized. These dividends will be dispersed annually using Blockstream’s asset management platform.
The text says the goal is to “create a legal framework to transfer digital assets that are used in public issuances in El Salvador, as well as regulate the requirements and obligations of issuers and providers of digital assets.”
The proposed blockchain bonds, with a minimum investment of just $100, are meant to help finance the construction of a tax-free, coastal Bitcoin City that would have geothermal energy from a nearby volcano for mining digital coins.
Read more: El Salvador Committed to Bitcoin
