El Salvador Takes First Major Step to Issue Its $1B Bitcoin Bond

The El Salvador presidency has submitted a digital securities bill to lawmakers, paving the way for the Central American nation to issue its $1 billion bitcoin bonds, Bloomberg reported on Wednesday.

Per the report, a spokesperson for the presidency released a copy of the 33-page on Tuesday, calling for a digital assets commission and a Bitcoin Fund Management Agency to police crypto-related debt sales.

The bill aims to “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.”

El Salvador’s $1B Bitcoin Bond

A year ago, El Salvador’s bitcoin-loving president Nayib Bukele, announced that the country will be constructing a crypto-powered city, dubbed Bitcoin City, which will be financed by $1 billion bitcoin bonds.

At the time, Bukele noted that the country will be issuing its $1 billion in bonds on the Liquid Network, a Bitcoin layer-2 solution. He also stated that the bond will be split into two; $500 million for the Bitcoin City project and the other $500 million to buy bitcoin. The bond comes with a coupon rate of 6.5%.

The offering of the bond was supposed to have launched earlier this year but has faced delays due to several reasons, including legislative holdup. 

The country’s finance minister, Alejandro Zelaya, said earlier this year that the bond was supposed to be issued between March 15 and 20 but was delayed due to the Russia-Ukraine war.

El Salvador Continues to Buy Bitcoin

El Salvador became the first country to adopt Bitcoin as a legal tender; a step that had been met with criticism from governments and organizations.

Since making Bitcoin a legal tender, the Central American nation has bought more than $350 million worth of the leading digital asset with its last major purchase coming in July. At the time, the country added 80 bitcoins to its portfolio which was bought at $19,000 per coin.

Despite reports saying El Salvador’s Bitcoin stash has lost 70% in value due to the bear market, President Bukele recently announced that the country will be buying 1 bitcoin daily.