The Bitcoin City
El Salvador Passes a Ground-Breaking Law on Cryptocurrency Transfers: Bitcoin-Backed Bonds.
As the first country in the world to recognize Bitcoin as a legal tender two years ago, El Salvador recently approved a law governing the issuance of other digital assets by both the government and private individuals.
The Digital Assets Issuance bill was approved by the Congress of El Salvador with 62 votes in favor out of 84.
The National Bitcoin Office of El Salvador announced the news in a tweet thread on 11 January 2023, stating that they will issue the bonds soon.
With the approval of the Digital Assets Issuance Bill, El Salvador will introduce its first round of ‘volcano bonds’ to reduce foreign debt and establish the ‘Bitcoin City’ investment center. The bill, supported by ruling party lawmakers in coalition with President Nayib Bukele, aims to attract local and foreign investors.
Legislation Details
“The purpose of this law is to establish the legal framework that grants legal certainty to transfer operations to any title of digital assets used in public issuance offers,” the legislation states.
Under the law, issuers may use existing digital assets to make public offerings while generating new ones.
Furthermore, the law establishes the formation of the “National Commission for Digital Assets” and the “Bitcoin Funds Administration Agency.” The commission will be responsible for administering, maintaining, and investing the funds from public offerings of digital assets conducted by the government.
The terms of the law are inapplicable to digital currencies issued by central banks of any country or region, and to digital assets recognized as legal tenders, such as Bitcoin, the video game ecosystem, or non-fungible tokens.
Volcano Bonds and The Bitcoin City
Although Bukele's office has not officially commented on the new legislation yet, the president shared a Twitter message from the country’s Bitcoin office stating that “the new Digital Securities Law was approved by an overwhelming majority.”
The idea of BTC-backed bonds, named after the Conchagua volcano, was first proposed by President Bukele in November of 2021. Bukele plans to raise $1 billion through the issuance of bonds, of which half will be invested directly in Bitcoin.
He would use the remaining half to build a substantial bitcoin mining operation that will run with the volcano's geothermal power and to establish ‘Bitcoin City’.
Bukele introduced Bitcoin City in May 2022 as a business hub to draw global investment to the country’s crypto and financial industries.
He declared on 17 November 2021 that his government would purchase one Bitcoin a day but did not specify for how long. The government has already purchased 2,381 Bitcoins for $107 million.
Sources: www.kitco.com, www.aljazeera.com, www.binance.com, twitter.com, www.investing.com, www.financialexpress.com, coinmarketcap.com, protos.com, tomorrow.city
analyst opinion
Eda Tutkun
As the first country in the world to recognize Bitcoin as a legal tender two years ago, El Salvador recently approved a law governing the issuance of other digital assets by both the government and private individuals.
The Digital Assets Issuance bill was approved by the Congress of El Salvador with 62 votes in favor out of 84.
The National Bitcoin Office of El Salvador announced the news in a tweet thread on 11 January 2023, stating that they will issue the bonds soon.
With the approval of the Digital Assets Issuance Bill, El Salvador will introduce its first round of ‘volcano bonds’ to reduce foreign debt and establish the ‘Bitcoin City’ investment center. The bill, supported by ruling party lawmakers in coalition with President Nayib Bukele, aims to attract local and foreign investors.
Legislation Details
“The purpose of this law is to establish the legal framework that grants legal certainty to transfer operations to any title of digital assets used in public issuance offers,” the legislation states.
Under the law, issuers may use existing digital assets to make public offerings while generating new ones.
Furthermore, the law establishes the formation of the “National Commission for Digital Assets” and the “Bitcoin Funds Administration Agency.” The commission will be responsible for administering, maintaining, and investing the funds from public offerings of digital assets conducted by the government.
The terms of the law are inapplicable to digital currencies issued by central banks of any country or region, and to digital assets recognized as legal tenders, such as Bitcoin, the video game ecosystem, or non-fungible tokens.
Volcano Bonds and The Bitcoin City
Although Bukele's office has not officially commented on the new legislation yet, the president shared a Twitter message from the country’s Bitcoin office stating that “the new Digital Securities Law was approved by an overwhelming majority.”
The idea of BTC-backed bonds, named after the Conchagua volcano, was first proposed by President Bukele in November of 2021. Bukele plans to raise $1 billion through the issuance of bonds, of which half will be invested directly in Bitcoin.
He would use the remaining half to build a substantial bitcoin mining operation that will run with the volcano's geothermal power and to establish ‘Bitcoin City’.
Bukele introduced Bitcoin City in May 2022 as a business hub to draw global investment to the country’s crypto and financial industries.
He declared on 17 November 2021 that his government would purchase one Bitcoin a day but did not specify for how long. The government has already purchased 2,381 Bitcoins for $107 million.
Sources: www.kitco.com, www.aljazeera.com, www.binance.com, twitter.com, www.investing.com, www.financialexpress.com, coinmarketcap.com, protos.com, tomorrow.city
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