El Salvador has finally succeeded in passing an important law. It is a legislative framework that makes it possible to market so-called Bitcoin government bonds. The purpose with the bonds is to raise money for the construction of “Bitcoin City” and of course to buy additional Bitcoin.
Signature of President Bukele
The only thing missing under the bill is the signature of President Nayib Bukele of El Salvador. On January 11, it passed by 62 votes to 16 against a key vote in parliament. This brings the so-called volcano bonds one step closer. The idea is to use the capital of the government bonds to mine Bitcoin from volcanic energy, among other things.
El Salvador’s National Bitcoin Office also announced the passage of the important law in a thread on Twitter. It notes that it will not be long before the bonds will hit the market.
“If we issue the first volcano bonds, we will once again be at the forefront of this new monetary revolution,” said the National Bitcoin Office. If we are to believe the words of the Bitcoin body, it is only a matter of time before government bonds hit the market.
Lots of options for El Salvador
If we are to believe Bitfinex, which is the exchange that supports El Salvador with the bonds, the country can use it to raise money to pay off its debts, finance the construction of Bitcoin City and set up a mining infrastructure. That seems a bit much for the limited amount of capital El Salvador wants to raise, but we’ll see. The goal with the bonds is to raise $ 1 billion in capital.
Investors in the bonds not only get a fixed interest rate, but also 50 percent of the profit from the Bitcoin the country buys with that capital. It is not clear whether the investors also receive a share of the mining proceeds as a reward. In that sense, they are truly unique bonds that El Salvador intends to put on the market in the near future.
