El Salvador Approves Bitcoin Bonds Bill, Will Legalise Bitcoin-Backed 'Volcano Bond'

El Salvador has also established a legal framework to govern other cryptocurrencies aside from Bitcoin.

Written by Radhika Parashar, Edited by David Delima | Updated: 12 January 2023 14:08 IST

El Salvador Approves Bitcoin Bonds Bill, Will Legalise Bitcoin-Backed 'Volcano Bond'

Photo Credit: Twitter/ PresidenciaSV

Bitfinex crypto exchange will be the provider of these Volcano Bonds

Highlights

El Salvador legalised BTC as a payment mode in 2021
People can invest as little as $100 to become a bond owner
Bitcoin bonds are expected to bring funds for Bitcoin City

El Salvador has legally welcomed Bitcoin bonds as proposed by President Nayib Bukele, the President of the central American nation. Passed on Wednesday, ‘Volcanic Bonds' would allow El Salvador to gather capital to pay debts for the country, while also bringing in contribution for Bukele's ambitious special economic zone called the ‘Bitcoin City', via ‘Volcano Tokens'. El Salvador aims at raising $1 billion (roughly Rs. 8,172 crore) via Volcano Bonds.

With a minimum investment of $100 (roughly Rs. 8,170), El Salvador residents will be able to enter Volcano Bonds — that will add to the nation's economy. Any appreciation in Bitcoin's values will be shared with the bond holders.

In totality, El Salvador aims at raising $500 million (roughly Rs. 4,084 million) to fund Bitcoin City's infrastructure, and an equal amount to purchase Bitcoin for the government's treasury.

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The Bitcoin Office, that is overseen by the Salvadoran authorities, posted more details about the newly passed law on Twitter.

4/ With the passing of this digital securities law, El Salvador will offer unprecedented consumer protection from bad actors in the 'crypto' space while also firmly establishing that we are open for business to all those who wish to build the future with us on bitcoin.
— The Bitcoin Office (@bitcoinofficesv) January 11, 2023

The domestic securities law, that had been making the rounds in the Salvadoran parliament for a while now, received 62 votes from legislators.

#Plenaria90:writing_hand::skin-tone-2: Con 62 votos a favor, creamos la Ley de Emisión de Activos Digitales. pic.twitter.com/g1poXwLoH3
— Asamblea Legislativa :flag-sv: (@AsambleaSV) January 11, 2023

The country has also established a legal framework to govern other cryptocurrencies apart from Bitcoin.

Bukele, the pro-crypto Salvadoran President welcomed the much-awaited decision, that is expected to drive more engagement with crypto assets by the masses.

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El Salvador's Legislative Assembly has just approved, by an overwhelming majority, the new Digital Securities Law!

Forward, always forward…

More information on this thread:point_down::skin-tone-3: https://t.co/8C21ZilyVP
— Nayib Bukele (@nayibbukele) January 11, 2023

El Salvador has chosen crypto exchange Bitfinex as the provider of these Volcano Bonds.

“This paves the way for more innovative financial solutions to meet the country's needs, including the forthcoming Volcano Token. This is a monumental achievement that will surely become part of history as El Salvador takes sovereignty over its financial future. Bitfinex's role as the technology provider for El Salvador's Volcano Token underlines our commitment to financial freedom and Bitcoin adoption,” the exchange owned and operated by iFinex stated in a post.

Bukele aims to power the tax-free Bitcoin City with the geothermal energy extracted from a regional volcano, that gives ‘Volcano Tokens' their name.

Miss El Salvador with Bitcoin Costume at Miss Universe 2023 pic.twitter.com/kE5pwZ41iy
— Crypto India (@CryptooIndia) January 12, 2023

Such is the support for BTC from El Salvador, that its Miss Universe 2023 representative, actually walked the stage on Thursday, January 12, in a golden coloured Bitcoin-inspired ensemble.

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Further reading: Cryptocurrency, El Salvador, Bitcoin Bond, Volcano Bond

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More