El Salvador flag with Bitcoin icons above it. 3d illustration
- According to crypto exchange Bitfinex, the technology provider of the bond, the Volcano bond would allow the country to raise funds to create Bitcoin infrastructure among other things.
- El Salvador has passed legislation to provide a legal framework for a bitcoin-backed Bond dubbed “Volcano Bond.”
In September 2021, El Salvador became the first ever country to legalize Bitcoin as a legal tender. The country made further attempts to provide financial incentives to citizens to download a crypto app. It can be recalled that this move attracted a series of criticisms from the International Monetary Fund (IMF) and other regulators. However, the country’s president Nayib Armando Bukele Ortez heavily stood on his grounds.
According to the latest report, El Salvador has passed legislation to provide a legal framework for a Bitcoin-backed Bond dubbed “Volcano Bond.” This is meant to fund its proposed “Bitcoin City”, and pay down sovereign debt. The bill had 62 votes for and 16 votes against, pending the approval of the president.
The National Bitcoin office of El Salvador has confirmed that the bill was passed on January 11.
Today El Salvador builds on our first-mover advantage by passing landmark legislation establishing a legal framework for all digital assets that are not bitcoin. As well as those issued on bitcoin.
The law also paves the way for volcano bonds which we will soon begin issuing.
El Salvador is the epicenter of Bitcoin adoption, and thus, economic freedom, financial sovereignty, censorship resistance & unconfiscatable wealth.
When we issue the first of the volcano bonds, we will once again be blazing the path forward for this new monetary revolution.
El Salvador to create Bitcoin infrastructure
According to crypto exchange Bitfinex, the technology provider of the bond, the Volcano bond would allow the country to raise funds to create Bitcoin infrastructure among other things. Bitfinex further explained that the proposed City would be a major economic zone as compared to the ones in China. This could offer crypto-friendly regulations, tax advantages, and incentivize Bitcoin business for its residents.
“Volcano” as a descriptor for the bond is largely due to the location of the Bitcoin city. It is reported that excess energy from the nearby Conchagua volcano would be used to provide renewable Bitcoin mining. The country has targeted to raise $1 billion for the bond, with half of it being used to fund the special economic zone.
Samson Mow, a BTC proponent involved in the creation of the volcano token said:
The move to pass the new Digital Securities Law, and enable new instruments like the Bitcoin Bonds, will help El Salvador take off its existing debts and will be critical to transforming the country into a major financial center of the world.
It was initially proposed that the tokenized bond would be denominated in the US dollar, have an annual interest rate of 6.5 percent, and with a 10-year maturity date.
It is important to note that the bill also provides a framework for all digital assets including those issued on BTC. It will also see the establishment of the National Digital Assets Commission, which will ensure security law is applied and provide protection from bad actors.
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With the passing of this digital securities law, El Salvador will offer unprecedented consumer protection from bad actors in the ‘crypto’ space while also firmly establishing that we are open for business to all those who wish to build the future with us on Bitcoin.
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