El Salvador continues its mass adoption of bitcoin by passing a bill that paves the way for the creation of a legal structure for all cryptocurrencies.
The legislative framework of a Bitcoin-backed bondknown as the “Volcano Bond”, it will be used to reduce government debt and support the establishment of a planned “Bitcoin City” in the country.
The National Bitcoin Office of El Salvador (ONBTC) tweeted the news on January 11, stating that the law had been approved on Thursday.
Exactly one year after the plan was presented, El Salvador’s Economy Minister María Luisa Hayem Brevé proposed the measure as the next step to achieve this goal.
The nation is now one significant step closer to creating the crypto bonds as a result of the approval.
El Salvador President Nayib Bukele with the laser eyes. Image from Nayib Bukele Twitter
El Salvador’s ambitious Bitcoin program
El Salvador became the first nation to make bitcoin legal tender in September 2021, requiring all business establishments to accept cryptocurrency.
As part of the rollout, government-issued digital wallets containing $30 worth of Bitcoin were made available to Salvadorans.
Taxes can be paid in BTC according to the law, and businesses are required to accept cryptocurrency unless technologically unable to do so.
The President of El Salvador, Nayib Bukele, is a true believer in cryptocurrencies. He has advocated for the acceptance of Bitcoin as a means to attract more Salvadorans into the formal economy, a third of whom do not have bank accounts.
Cover art/illustration via CryptoSlate
The volcano description for the bonds comes from the Bitcoin City site, which is slated to become a renewable crypto mining hub powered by hydrothermal energy from the adjacent Conchagua volcano.
One of the objectives of the bond issue would be to invest 50% of the funds in cryptocurrencies and the remaining 50% in the infrastructure required to expand the digital currency sector in the Central American nation.
Cryptobond Package: Citizenship in El Salvador
The tokenized bonds would be denominated in US dollars, have a 10-year maturity date, and earn 6.5% interest, according to the initial plan. The bonds should also allow investors to obtain citizenship of the country.
The ONBTC noted that the passage of this digital securities law provides “consumer protection against rogue players in the ‘crypto’ area, while firmly establishing that we are open to do business with all those who choose to create the future with us in bitcoin”.
BTC total market cap at $348 billion on the daily chart | Chart: TradingView.com
At the time of writing, Bitcoin is trading at $18,113, up 7.5% over the past seven days, Coingecko data shows.
Chart: Coingecko
The legalization of cryptocurrencies placed El Salvador on the world financial map. This new law furthers Bukele’s goals by laying the groundwork for a new global digital securities framework based on Bitcoin.
Meanwhile, Bitfinex reports that El Salvador’s Bitcoin City would be a special economic zone similar to China’s, providing tax breaks, crypto-friendly rules, and other incentives for cryptocurrency companies among its people.
-Reuters Featured Image
