El Salvador: $ 1 Milliarde u Bitcoin Bonds

El Salvador’s proposed digital securities law opens the door to Bitcoin Volcano Bonds and their mission to raise $1 billion to fund government activities. 

El Salvador: digital securities bill opens the door to Bitcoin Volcano Bonds

Eng Rechnung to regulate digital securities was presented to the Parliament of El Salvador in recent days, paving the way for the issuance of the long-awaited Bitcoin Volcano Bonds. 

Doing so was the country’s Economy Minister María Luisa Hayem Brevé, who aims to establish a National Digital Asset Agency that would oversee the regulation of digital asset issuers, service providers and other participants involved in the “public offering process” of digital securities.

The agency is the Bitcoin Funds Administration Agency (ABB) and will be a public law institution with its own legal personality and assets, technical characteristics, and economic, financial, and administrative autonomy. 

Not only that, AAB will also be empowered to establish offices abroad, as well as in the country of El Salvador itself. 

Included among the activities the agency will be able to do is to invest the funds received through public offerings of digital assets made by the State of El Salvador, sou wéi Bitcoin Volcano Bonds. 

El Salvador: the Bitcoin Volcano Bonds and raising $1 billion for the government

Designed exactly virun engem Joer, déi Bitcoin Volcano Bonds aim to raise $1 billion in market financing, dedicated to government enterprises such as the construction of Bitcoin City. 

The name “Volcano” recalls one of the most important projects the country intends to finance, and that is the creation of a Bitcoin mining farm powered by the energy of a volcano. 

Given the huge campaign against the “energy waste” and “unsustainability” of classic mining, El Salvador’s new mining farm would propose a greener version for Bitcoin. In fact, the volcano energy available in large quantities in the Central American country turns out to be cleaner. 

With the volcano-powered mining farm, the country of El Salvador would secure some sort of return, assuming that revenues exceed expenses. In contrast, the Internationalen Währungsfonds has warned that the issuance of Bitcoin Volcano Bonds, being bonds, would increase the country’s already substantial debt.  

A first concrete step after a year of postponement

dëst Bitcoin Volcano Bonds story has undergone several postponements over the past year. Indeed, after the official announcement last November 2021, the Bitcoin-backed bond launches were postponed to December 2021, then March 2022, June 2022, and finally, last September 2022. 

Regulatory difficulty seems to have been the motivation for postponement each time, in addition to also the bearish crypto trend that has characterized the entire year since the long crypto winter. 

Zu der Zäit vum Schreiwen. BTC is trading at $16,658, nowhere near what it was last year in November, when BTC was at its ATH – All Time High – of $67,000.

In any case, the current bill, which has yet to be approved by a majority in El Salvador’s Congress, appears to be a new concrete step toward the realization of the $1 billion Volcano Bonds. 

The involvement of Paolo Ardoino of Tether and Bitfinex

In the run-up to El Salvador’s Bitcoin Volcano Bonds, while there are those who criticize the move like the IMF, there are those, on the other hand, who support it, like De Paolo Ardoino, CTO vun Halter an Bitfinex. 

Digital Wäertpabeieren Gesetz erlaabt El Salvador d'Finanzplaz vun Zentral- a Südamerika ze sinn.
🇸🇻 https://t.co/1QBcrjxQCC

— Paolo Ardoino 🍐 (@paoloardoino) November 23, 2022

"Digital Securities Gesetz erlaabt El Salvador d'Finanzplaz vun Zentral- a Südamerika ze sinn."

Ardoino’s support also stems from the fact that the Bitfinex Krypto-Austausch would have to obtain a license in order to process and list the issuance of bonds in El Salvador.

Essentially, such bonds would pay a Rendement vun 6.5%, allowing accelerated citizenship for investors. 

Once the initial $500 million is monetized, the government will share half of the additional earnings with investors in the form of a Bitcoin dividend. These dividends will be distributed annually using Blockstream‘s asset management platform.

The partnership with Lugano

Leschten Mount, the city of Lugano formed eng Partnerschaft with the Republic of El Salvador by officially signing a Memorandum of Understanding of Economic Cooperation. 

The signatures of that agreement were performed by Lugano Mayor Michele Foletti and El Salvador’s ambassador to the US, Milena Mayorga.  

The announcement of the collaboration was made during the Plan B Forum event in Lugano, which brought together international experts in the Bitcoin and Blockchain world. 

Plan B war founded by Tether and the city of Lugano, which, together with GoCrypto, formalized payments in Bitcoin, Tether and LVGA in the Swiss city.