El Salvador passes landmark crypto bill, paving way for Bitcoin-backed bonds

El Salvador has passed landmark legislation providing the legal framework for a Bitcoin-backed bond – known as the “Volcano Bond” – which will be used to pay down sovereign debt and fund the construction of its proposed “Bitcoin City”.

The bill passed on Jan. 11 with 62 votes for and 16 against, and is set to become law after it is ratified by President Bukele.

The National Bitcoin Office of El Salvador announced the passage of the bill in a Jan. 11 tweet thread, noting that they will begin issuing the bonds soon.

According to crypto exchange Bitfinex, which is the technology provider for the bonds, the Volcano Bond – or Volcano Tokens – would allow El Salvador to raise capital to pay down its sovereign debt, fund construction of the Bitcoin City, and create Bitcoin mining infrastructure.

The volcano descriptor for the bonds is derived from the location of the country’s Bitcoin City, which is set to become a renewable crypto-mi hub powered by hydrothermal energy from the nearby Conchagua volcano.

Cast your vote now!

Bitfinex notes that the city would be a special economic zone similar to those seen in China, which would offer tax advantages, crypto-friendly regulations and otherwise incentivize Bitcoin businesses for its residents.

The bonds have been targeted to raise $1 billion for the country, with half of it going into building the special economic zone.

According to the initial proposal, the tokenized bonds would be denominated in U.S. dollars, have a ten-year maturity date, and carry an annual interest rate of 6.5%.

Related: Bitcoin, Sango Coin and the Central African Republic

Speaking to Cointelegraph Samson Mow, a Bitcoin proponent who has been involved in the development of the Volcano Token, suggested that the bill’s passage could help turn the country into a “major” financial hub.

“The move to pass the new Digital Securities Law, and enabling new instruments like the Bitcoin Bonds, will help El Salvador to pay off their existing debts, and will be critical to transforming the country into a major financial center of the world.”

The bill also includes a legal framework for all digital assets that are not Bitcoin, in addition to those issued on Bitcoin, and creates a new regulatory agency that will be in charge of applying the securities law and providing protection from bad actors.

All Dutch and English crypto news!

Crypto price predictions: SUSHI, Immutable X, AGIX

SushiSwap price jumped as volume and revenue in DEX platforms rose. Immutable X (IMX) did well after the launch of Passport. SingularityDEX token could be forming a...

Bitcoin slips amid market reaction to US jobs report

Bitcoin price fell slightly to retest support near $23,250 on Friday. The top cryptocurrency's price action mirrored early trades on Wall Street as the market reacted...

Aandeel van de grote Bitcoin whale stijgt meer dan 100% in één maand

Het bedrijf MicroStrategy kocht vorig jaar een gigantisch aantal Bitcoin. Het bedrijf schreef in 2022 meer dan 8.800 Bitcoin bij op de balans, en de...

$20K Bitcoin may return, says analyst as US unemployment hits 54-year low

Bitcoin (BTC) fell prior to the Feb. 3 Wall Street open as fresh United States economic data came in "hot hot hot." BTC/USD 1-hour candle chart...

Beste exchanges

Koop je crypto bij Bitvavo