El Salvador President Nayib Bukele has advanced his plan to issue Bitcoin bonds by preparing 20 bills specifically designed to provide the legal framework for the campaign.
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The head of the Finance Ministry of El Salvador, Alejandra Zelaya, said on January 4 that the bills would include regulations on the issuance of securities in the form of digital currency to ensure the viability of Bitcoin bonds. . However, he did not suggest a timeframe for submitting the legislation to lawmakers.
“We are on track to provide a secure regulatory structure and procedural certainty for all buyers of Bitcoin bonds.”
Bitcoin Bonds are the latest effort from President Nayib Bukele, catering to his ambitions to build a “Bitcoin City”, which will provide a digital educational environment and technology, geothermal energy for the entire city as well as efficient and sustainable public transport.
– See more: Should You Invest in El Salvador’s “Bitcoin Bonds”?
One of the features of Bitcoin City is BTC mining with volcanic energy. That’s it, Bitcoin bonds are also known as “Volcano bonds”. The first 0.00599179 Bitcoins were mined by El Salvador on October 1, 2021, the same day the planned implementation began.
Funds from the Bitcoin bond issue can also be used to pay for a $800 million European bond issue that matures in January 2023. Zelaya revealed El Salvador will need to find investors finance to help them meet this payment obligation.
“We can simply make payments without creating another European bond in the traditional market. At the same time, we can find a bond denominated in USD and receive payment in Bitcoin.”
Eurobonds are debt instruments issued by governments, financial institutions or businesses in a currency other than that of the issuing country. Zelaya also expressed significant interest in Bitcoin bonds from investors as they offer BTC exposure and 10-year maturities with a yield of 6.5%.
However, Zelaya insists that the plan to launch Bitcoin bonds will not prevent El Salvador from entering the traditional financial market. Notable partners with El Salvador in this launch include blockchain developer Blockstream and iFinex, which are closely related to stablecoin Tether (USDT). The bond is scheduled to be issued on Blockstream’s Liquid Network and processed by iFinex.
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