El Salvador has released a legal framework for Bitcoin-backed bonds known as “volcano bonds” that will be used to pay off sovereign debt and finance the construction of the proposed “Bitcoin City.” passed a landmark law that provided
The bill was passed on January 11 by 62 votes in favor and 16 against, and is expected to be enacted after President Bukele’s approval.
#Plenaria 90✍ Upvote Con 62 votes. pic.twitter.com/g1poXwLoH3
— Asamblea Legislativa (@AsambleaSV) January 11, 2023
El Salvador’s National Bitcoin Authority announced the passing of the bill in a January 11 Twitter thread, saying it will start issuing bonds soon.
3/ El Salvador is the epicenter of Bitcoin adoption, bringing economic freedom, financial sovereignty, censorship resistance and unconfistable wealth.
When we issue our first Volcano Bond, we will once again pave the way for this new financial revolution.
— Bitcoin Office (@bitcoinofficesv) January 11, 2023
according to Volcano Bonds (Volcano Tokens) will help El Salvador raise capital to repay national bonds and fund the construction of Bitcoin City to cryptocurrency exchange Bitfinex, the provider of bond technology. and to create a Bitcoin mining infrastructure.
The bond’s volcano descriptor originates from the location of Bitcoin City in the country that is to become a renewable cryptominin hub. powered by hydrothermal energy From the nearby Conchagua volcano.
Bitfinex says the city will become a special economic zone similar to those found in China. Offer tax incentivescrypto-friendly regulations, and otherwise encourage residents to do bitcoin businesses.
The bond aims to raise $1 billion for the country, half of which will be used to build a special economic zone.
according to the initials suggestionthe tokenized bond is denominated in US dollars and has a maturity of 10 years, Annual interest rate 6.5%.
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Samson Mow, a Bitcoin advocate who has been involved in the development of the Volcano token, told Cointelegraph that passing the bill could help transform the country into a “major” financial hub. rice field.
“The move to pass new digital securities laws and enable new instruments like Bitcoin bonds is critical to helping El Salvador pay off its existing debt and transforming the country into a major global financial center. .”
The bill also includes the legal framework for all digital assets other than bitcoin, in addition to those issued in bitcoin, with a new government responsible for enforcing securities laws and protecting them from bad actors. Create a regulatory body.
5/ The new law also creates the National Digital Assets Commission, a regulatory body responsible for enforcing securities laws, protecting the rights of Salvadoran digital asset purchasers and issuers, and deterring fraudsters from operating in El Salvador. increase.
— Bitcoin Office (@bitcoinofficesv) January 11, 2023
