El Salvador introduces bill to launch bitcoin “Volcano Bonds”

Key facts:
  • President Bukele’s goal is to attract billions of dollars of investment with the bonds.

  • A year ago, “volcano” bonds were presented to the world, but their approval was delayed.

Exactly one year after the initiative was announced, today it was confirmed that El Salvador is taking the first legal steps to approve the launch of its long-awaited Bitcoin Bonds. Through the Minister of Economy, Maria Luisa Hayem Brevé, a bill that will make the “Volcano” Bonds possible has been introduced to the country’s assembly.

This is the name that President Nayib Bukele gave to an initiative that seeks to attract international capital for the development of El Salvador as a pioneer nation in the adoption of Bitcoin. According to official documents of the Legislative Assembly, under the title of “Digital Assets Issuance Law”, the State proposes to establish a legal framework for any transfer of digital assets or titles of public offerings that are carried out in the national territory.

Likewise, it is proposed to clarify the bases to regulate any actor that is dedicated to issuing, providing or operating with cryptocurrencies, such as bitcoin (BTC), in the country. In this way, it is expected that the government can issue billions of dollars in bitcoin bonds, which will be launched on the side chain (or sidechain) Liquid.

50% of these bonds will be destined to the purchase of BTCwhile the other 50% will be invested in the development and construction of the energy infrastructure for cryptocurrency mining within the country.

The presentation of the legal document has been celebrated by the bitcoiner community, who have been closely involved in the adoption that the Central American country has made in the ecosystem. For example, Bitfinex CTO Paolo Ardonino, described this initiative as a step towards El Salvador becoming “the financial center of Central and South America.”

On the other hand, although President Bukele has not made statements about the launch on his social networks, he has dedicated himself to share on your twitter the announcement and impressions generated by the legal presentation of the «Volcán» bonds.

The news has generated quite a stir since the appearance of these bonds on the market has been expected for a yearwhose launch was delayed by the development of this law, the conflicts in Russia and Ukraine, as well as the bitcoin bear market, according to official statements.

It is also striking that the country has now decided to launch the initiative when the Bitcoin bear market is at its peak and the FTX debacle has affected the trust in the ecosystem.

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