Advance legislation and supervision of El Salvador’s BTC bond issuance plan approaching

It is getting closer and closer to the issuance of Bitcoin bonds in El Salvador. The country’s finance minister said today that the government will submit about 20 bills to Congress to begin the process. President Nayib Bukele subsequently confirmed this via Twitter.

The country’s finance minister further pointed out that we are the first country to issue bitcoin bonds. And because we are the first country to do so, it needs to be supervised, and the government is drafting appropriate legislation for the bonds issued. 

El Salvador became the first country in the world to make Bitcoin legal tender last year. This move was praised by the Bitcoin community, but was criticized by the World Bank, the International Monetary Fund and global credit rating agencies. Citizens have also repeatedly organized protests against El Salvador’s Bitcoin law. The country’s Bitcoin-loving president continues to announce crypto-related projects, with Bitcoin Bond and Bitcoin City being one of the latest projects. 

It is reported that El Salvador announced last month that it will issue bitcoin-backed bonds. It plans to issue a 10-year US dollar-denominated bond worth US$1 billion with a coupon rate of 6.5%. These securities will be issued sometime in the first three months of 2022. Among them, 300 million U.S. dollars has been pledged. Of the US$1 billion raised by El Salvador, US$500 million will be used to build energy and bitcoin mining infrastructure, and US$500 million will be used to purchase more bitcoins and keep them in the national treasury.

The government hopes that the issuance will help create a Bitcoin city (a Bitcoin city planned to be built at the foot of the Conchagua volcano) for Bitcoin advocates in the east of the country, powered by the geothermal energy of a nearby volcano. El Salvador’s President Nayib Bukele did not give an estimated completion date for the city, but he previously estimated that it would cost about 300,000 bitcoins (12.9 billion pounds) to complete the city’s infrastructure.

In addition, El Salvador’s President Nayib Bukele also published a Bitcoin forecast for 2022 on Twitter, stating that Bitcoin City will begin construction and Volcano bonds will be oversubscribed.

El Salvador’s bitcoin bonds will be issued by Blockstream, a bitcoin infrastructure company that has been helping the Lightning Network (a second-tier solution that helps make bitcoin transactions faster and cheaper) expand in the country. 

Regarding the issuance of Bitcoin bonds, Moody’s stated that the issuance of Bitcoin bonds by the Salvadoran government poses significant risks to potential investors and traditional bond holders.

And Bitcoin strategist Greg Foss shared his optimistic view of this move. He believes that the bond will attract many different investors. According to Foss, in addition to being a profitable investment, the Bitcoin bond will provide El Salvador with “more financing options.” In addition to being attractive to investors, Foss also stated that the bond will have Helping to increase El Salvador’s own financing flexibility outside the scope of the “restrictive” International Monetary Fund.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/advance-legislation-and-supervision-of-el-salvadors-btc-bond-issuance-plan-approaching/
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