El Salvador lays the groundwork for legislative proposals
The Bitcoin Volcano Bonds in the country of El Salvador have taken a big step towards issuance. After the project suffered delays, a digital securities bill has now been introduced by the Salvadoran Congress yesterday.
1 year ago (and a day) – I got a shout from @nayibbukele about the Volcano Bond idea.
This is how you push back against the IMF and crooked Wall St banks, I think.
— M🌋X KEISER tweet-poet and award-winning journalist (@maxkeiser) 23 November 2022
El Salvador, the first country to adopt Bitcoin as legal tender, is thus paving the way for BTC-backed volcano bonds. President Najib Bukele announced the project, which aims to attract investors and capital to El Salvador, last November.
According to President Bukele’s plans, the BTC bonds, named after the mining’s energy source, the Conchagua volcano, will raise $1 billion.
That billion is then split in half. One half will be invested directly in BTC, while the other 500 million will be used to finance and build an energy and mining infrastructure as well as build Bitcoin City.
Bitcoin City is expected to be a giant project that will primarily attract foreign investors. That the plans are not low-key is also shown by the wording that Bitcoin City will become the “Singapore of the West”.
There will only be a 10 per cent value added tax in the city. All other fees will be waived. Reliable sustainably produced energy will be generated by the nearby volcano, which will not least serve Bitcoin mining.
Bond buyers will get a return of 6.5 percent after five years and also the option of fast-track citizenship. Additional profits are to be split in half with investors as a Bitcoin dividend once the first $500 million has been monetized.
When Bitcoin Volcano Bonds?
The bill, which was presented in Salvador’s Congress yesterday, is intended to create government guidelines so that buyers of the bonds feel safe buying them.
— Samson Mow (@Excellion) 23 November 2022
“Digital securities law will enable El Salvador to be the financial center of Central and South America,” wrote Paolo Ardoino, CTO of Bitfinex.
While the bonds will be issued on Blockstream’s commercialized Liquid Network, iFinex, the parent company behind Bitfinex and Tether, will handle the transactions. Bitfinex is expected to obtain a license in El Salvador to carry out this issuance.
Dividend distributions will be made annually through Blockstream’s asset management platform, according to the Salvadoran government.
The next step is for Salvador’s Congress to pass the law, with President Bukele’s Nuevas Ideas party holding a comfortable majority in the legislature. According to a source close to the government, the law is expected to be adopted before Christmas.
The issuance of volcano bonds should be expected another two to three months later, Paolo Ardoino revealed in an earlier statement.
At press time, Bitcoin continued its weak recovery. BTC traded at $16,548, facing a major resistance zone above $15,600.