El Salvador is forging ahead with the plans to launch bitcoin bonds.
The new plans will involve the creation of new legislation to give legal backing to the bonds.
The country first adopted Bitcoin as legal tender in September 2021 and has made significant strides.
El Salvador is riding the waves of its Bitcoin adoption to introduce new offerings to the citizens. The country wants to give Bitcoin bonds legality within the framework of El Salvadoran law.
New Bills For Bitcoin Bonds
El Salvador is one step closer to launching Bitcoin bonds after the government announced that 20 new bills will be presented to the country’s legislative house. Head of Treasury, Alejandro Zelaya made this known to media house El Mundo earlier in the week.
“This is to provide a legal structure and legal certainty to everyone who buys the Bitcoin bond,” said Zelaya. The government official did not give a date for the passage of the bill into law but experts believe that this will occur in the coming months.
In November of 2021, President Bukele gave the groundbreaking announcement of Bitcoin City, built on the foundation of Bitcoin. The self-sustaining city is to be funded by $1 billion worth of Bitcoin bonds which are also referred to as the Volcano bonds because of the reliance of geothermal energy by the proposed city.
According to Zelaya, the amount realized from the bond issue will be used to settle the $800 million Eurobond issue that is expected to mature in January 2023. “We can simply make payments without creating another Eurobond in the traditional market, and we can find a bond that is denominated in dollars and receives payment in Bitcoin.”
President Nayib Bukele predicted that in 2022, the “volcano bonds will be oversubscribed” and Zelaya has indicated similar sentiments that investors will be offered exposure to BTC.
El Salvador’s Journey So Far
El Salvador’s move to embrace Bitcoin scaled legislative scrutiny in a matter of months and experts believe that the new bills regarding the Bitcoin bond will receive swift attention from members of the parliament.
Since the adoption of the cryptocurrency as legal tender, the country has used the gains from Bitcoin to build a world-class veterinary hospital. The President also announced the building of schools around the country with the gains. Since September, the country has stacked over 1,000 BTC in a strategy that involved purchasing the dips.
The IMF has criticized the country’s decision to embrace Bitcoin as legal tender while others have called into question the dictatorial manner Bukele uses to drive up adoption. Businesses in El Salvador are legally mandated to accept Bitcoin as payment for goods and services.