In the midst of the cryptocurrency market crash, El Salvador finally takes a decisive step towards the realization of its ambitious “Bitcoin bonds” project. Economy Minister María Luisa Hayem Brevé presented a bill that confirms the government’s plan to raise a billion dollars and invest it in the construction of a “Bitcoin city”.
A 33-page bill on digital securities, dated November 17, urges lawmakers to create a legal framework that uses digital assets in El Salvador’s public issuances. They must also consider all the requirements for this procedure and the obligations of the issuers and providers of assets.
The “volcano bonds” or “Bitcoin bonds” were introduced by the government of Nayib Bukele in 2021. The initial plan proposed issuing about USD 1 billion of these bonds and allocating the funds raised to the construction of a “Bitcoin city” on the base. of the Colchagua volcano. Supposedly, the hydrothermal energy from the volcano would make the city a perfect cryptocurrency mining facility. Half of the funds raised would be invested directly in Bitcoin.
Over the past 12 months, the project has been repeatedly delayed; at some point its release phase was scheduled for early March, then pushed to September only to be postponed yet again due to “security reasons”.
According to some sources, the project could be approved by legislators before Christmas. Paolo Ardoino, CTO of the Bitfinex cryptocurrency exchange, which is collaborating with the government of El Salvador on the bond project, seems optimistic about that moment:
Digital securities law will enable El Salvador to be the financial center of central and south America.
🇸🇻 https://t.co/1QBcrjxQCC— Paolo Ardoino 🍐 (@paoloardoino) November 23, 2022
The Digital Securities Law will allow El Salvador to be the financial center of Central and South America.
After converting BTC to legal tender on September 7, 2021, El Salvador accumulated more than 2,301 BTC for some USD 103.9 million. During the bull market, the profit from the investment was even used to build schools and hospitals.. However, as the country’s economy continues to struggle, 77.1% of citizens prefer that the Salvadoran government stop “spending public money on Bitcoin.”
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