El Salvador will issue bonds in bitcoin

In El Salvador, Congress came to the decision to pass a law to raise money through bitcoin. Thus, the first bonds will appear in the world, which will function on the blockchain of the flagship cryptocurrency.

62 deputies voted for the adoption of such a law, 16 were against such innovations. The new bonds will be valued in USD and have a maturity of up to 10 years. The authorities of El Salvador promise a yield of 6.5% per annum.

It is worth noting that this bill implies the development of a certain set of rules to which these bonds will be subject. The authorities want to ensure the full legal value and inviolability of digital bonds and their circulation on the bitcoin blockchain.

The authorities have shared their goals for passing a law with digital bonds in the form of bitcoin. The government of El Salvador announced that it intends to raise about $500,000,000 in this way for the construction of an unusual city, which will be called “Bitcoin City”.

The country's authorities have previously reported about such plans, but now they have shown exactly how they will collect funds. The “Bitcoin City” will consist of several objects that receive geothermal energy, which is subsequently used to mine the flagship cryptocurrency. The geothermal energy absorbers will be located near the volcano, which should make this process extremely efficient.

The bill passed also considered a proposal to establish a national Digital Assets Commission that would act as the regulator of cryptocurrencies in El Salvador and promote the digital asset market.

The authorities have also expressed a desire to create a Bitcoin Fund Administration Agency. The activities of the latter will be in the field of managing, protecting and investing funds received from profits from public offerings of digital assets conducted by El Salvador.

After an unsuccessful 2022 for the cryptocurrency market, representatives of other countries began to ridicule El Salvador for adopting cryptocurrency at the state level and investing in BTC in October 2021. Finance Minister Alejandro Celaya announced the financial stability of El Salvador and assured that they were not in danger. The President of the State, in turn, said that the country would start buying one bitcoin every day. Whether his statement is satirical is not known, but in this case, in a few years, such actions could help El Salvador find a more stable position in the field of finance.

In October 2021, El Salvador became the first country in the world to adopt Bitcoin at the state level. This means that it should be much easier for people who own this cryptocurrency to deal with investments, and business owners are encouraged to provide people with the option to pay in BTC.