Announced a year ago, government bonds correlated to Bitcoin (BTC) could soon be coming to El Salvador. As part of a bill to regulate cryptocurrencies, Economy Minister Maria Luisa Hayem explains in detail how this future unique investment method will work.
El Salvador maintains its position on Bitcoin (BTC)
Despite the fall in the price of Bitcoin (BTC) since its all-time high in November 2021, El Salvador maintains its enthusiasm for the world’s leading cryptocurrency.
Recently, Maria Luisa Hayem, the country’s Minister of Economy, presented the legislature with a draft law on digital assets.
Consisting of around 30 pages, this draft legislation aims to implement a legal framework to facilitate the adoption of cryptocurrencies:
🚨ULTIMAHORA🚨@nayibbukele presenta al congreso de el Salvador 🇸🇻 la PRIMERA LEY DE ACTIVOS DIGITALES⚖️
Con esto se ampliaría formalmente el marco legal, el cual ya NO regularía solo el uso de btc en el país, sino de CUALQUIER criptoactivo. pic.twitter.com/CaHob92a9w
– Criptolawyer (@criptolawyer) November 22, 2022
” Nayib Bukele presents El Salvador’s first cryptocurrency law to Congress. This would officially expand the legal framework, which would not only regulate the use of Bitcoin in the country, but all cryptocurrencies. “
In addition, if this law is passed, El Salvador will introduce Bitcoin-backed government bonds (BTC).
On a country-wide scale, the amount of money expected from these bonds is significant: the Salvadoran government’s goal is to raise $1 billion, which represents nearly 4% of the country’s GDP.
These bonds, dubbed “Volcano Bonds”, will allow the country to increase its stocks of bitcoins. In addition, the state wants to invest in Bitcoin energy and mining using volcanic geothermal energy.
In exchange, investors will get a 6.5% return on the amount invested, and will receive dividends in Bitcoins through the Blockstream platform.
Incidentally, the cryptocurrency exchange Bitfinex has been chosen to process the El Salvador bond issue. According to Bitfinex CTO Paolo Ardoino:
Digital securities law will enable El Salvador to be the financial center of central and south America.
🇸🇻 https://t.co/1QBcrjxQCC– Paolo Ardoino 🍐 (@paoloardoino) November 23, 2022
“The Digital Assets Law will allow El Salvador to be the financial centre of Central and South America “
Remember that the government of El Salvador has acquired 2,392 bitcoins (BTC) since September 2021. Today, the loss in value of these assets amounts to – 63.5%.
Now, it only remains to be seen if the country’s legislature wants to extend its economic and political investment in the cryptocurrency sector.
