El Salvador Passes Bill Allowing Its Bitcoin Bond Issuance
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El Salvador lawmakers have passed a digital securities bill allowing the Central American nation to issue its $1 billion bitcoin bonds, the country’s Bitcoin Office announced Wednesday. The bill was passed on January 11 with 62 votes to 16 and will become law after it is signed by bitcoin-loving President Nayib Bukele.
Paving the Way for Bitcoin Bond Issuance
The bill would create a “legal framework to transfer digital assets that are used in public issuances in El Salvador, as well as regulate the requirements and obligations of issuers and providers of digital assets.”
After becoming law, the legislation will allow El Salvador to raise capital to finance its crypto-powered city through the issuance of its bitcoin-backed bond.
The initiative was first announced by President Bukele in November 2021. At the time, the bitcoin-loving president stated that the country would be building a crypto-powered city dubbed “Bitcoin City,” which would be funded by a $1 billion bitcoin bond. The bond, which carries a coupon rate of 6.5%, will be divided into two, $500 million for the Bitcoin City project and the remainder to buy bitcoin.
The bond was supposed to have been issued last year but has faced delays due to legislative holdups and the Russia-Ukraine war, which started in February 2022.
El Salvador’s Bitcoin Adventure
El Salvador became the first country to make bitcoin a legal tender in September 2021. The decision has been met with a lot of criticism from regulators, lawmakers, and global organizations. However, the country is not fazed by these criticisms as it continues its bitcoin adventure.
The country has continued to accumulate bitcoin in its portfolio through its president. Since signing the bitcoin law, El Salvador has purchased 2,381 bitcoins for $107 million, with its last major purchase coming in July 2022. At the time, the Central American nation purchased 80 bitcoins at the cost of $19,000 each.
Bukele announced in November that El Salvador would begin purchasing one bitcoin every day.
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