El Salvador remains bullish on Bitcoin. The country’s president, Nayib Bukele, has progressed with plans of issuing Bitcoin bonds. The Salvadoran government is preparing 20 bills to offer a legal framework for the bonds.
El Salvador is working on a legal framework for Bitcoin bonds
On January 4, the head of the Treasury in El Salvador, Alejandra Zelaya, spoke to a local publication, El Mundo, saying that the bill will look into the regulations surrounding issuing securities as crypto assets. This ensures that the Bitcoin bonds proposed on November 2021 are viable.
This is to provide a legal structure and legal certainty to everyone who buys the Bitcoin bond,” he noted. However, Zelaya failed to issue an exact date when the proposed legislation will be tabled as a bill before lawmakers.
El Salvador is making plans to launch a Bitcoin city, which is part of what the bond issuance will be used for. The bond is expected to raise $1 billion that will be used to support the city. According to Bukele, the Bitcoin City will offer “digital and technological education, geothermal energy for the entire city, and efficient and sustainable public transport.”
The Salvadoran Bitcoin city made headlines towards the end of last year because of the proposed innovativeness. Bukele noted that the city would operate on clean energy mined from a volcano. It will also have a Bitcoin mining rig that harnesses power from the volcano.
Speaking to El Mundo, Zelaya also noted that the funds obtained from the bond issue would also be used to settle an $800 million Eurobond issue maturing in January 2023. Zelaya noted that the government did not want to take another Eurobond issue to fulfil its obligation.
“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,” he added.
El Salvador’s Bitcoin bond is attracting interest
Zelaya also noted that there was growing interest in the Bitcoin bond. The bond offers investors exposure to Bitcoin, and its maturity was capped at 10 years with a 6.5% interest.
Zelaya further assures that the issuance of the Bitcoin bond will not exclude the country from participating in the traditional financial market.
The bonds have already attracted several players in the crypto sector that will partner with El Salvador in the issuance. These parties include Blockstream and iFinex.
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