Bloomberg reports that El Salvador has passed a bill that would allow the country to sell Bitcoin-backed bonds. January 11th.
The country’s parliament approved the bill with 62 votes in favor and 16 against. President Naive Bukele must sign the bill.
The proposed bond is part of a larger cryptocurrency strategy. El Salvador will put $500 million from these bonds into Bukele’s proposed plan to build a “Bitcoin City” near a coastal volcano called Conchagua. The city uses clean volcanic energy to mine cryptocurrencies and uses Bitcoin as its primary currency.
The country will use the remaining $500 million to buy more Bitcoin on top of the 2,381 BTC ($42 million) it has already purchased. In fact, the country promises that she will buy 1 BTC per day. Bond holders will reportedly benefit if the value of Bitcoin rises.
Bitcoin bonds in El Salvador have been a work in progress for some time. Under Bukele’s leadership, El Salvador declared Bitcoin legal tender in 2021, with plans for the bond first announced in November of that year.
The bonds were scheduled to be introduced in early 2022, but market conditions slowed progress and the bonds were scheduled to be introduced in September 2022. However, bonds were delayed. Again that month due to security concerns, according to a statement from El Salvadorian partner Bitfinex.
Moreover, El Salvador appears to have had no potential bond buyers until recently. According to a February 2022 report, the county has collected her $500 million worth of verbal promises, plus he could win $5 billion.
Today, it is unclear when the country will begin issuing bonds and selling them to buyers, despite the necessary legislation being passed.
