Sunday, May 19, 2024

El Salvador Takes Serious Steps About Bitcoin Bonds

The El Salvadoran government is set to send around 20 bills to establish a foundation for issuing bitcoin bonds. Alejandro Zelaya, the Finance Minister, said the bills will provide a legal foundation for issuing the bonds. The premiere bitcoin bond issue would be worth $1 billion and bear a coupon of 6.5%.

The minister said the government is working to outline legislation. It would oversee the corresponding market regulation and issuance of securities in crypto assets. Zelaya said this will provide the much-needed legal structure and legal certainty to whoever buys the bitcoin bond.

He highlighted that the 20 new laws would focus on innovation and financial freedom. The bonds will initially be backed BTC and issued by the El Salvadoran government. It will be funded through taxes. The bonds will expire after a decade and is estimated to have a yearly return of 6.5% on investment.

Zelaya added that the bills will make the legal net, which will allow the Central American country to access $100 million from a regional financial institution. In June 2021, the World Bank said it would not help El Salvador’s bitcoin implementation. It highlighted environmental and transparency concerns.

Moreover, the bitcoin bond will support El Salvador’s ambitious plans of creating the world’s first Bitcoin City. The funds raised through the bonds would be used to build the infrastructure. It will also purchase bitcoin with President Nayib Bukele intending to make profits.

It should be noted that the International Monetary Fund had warned against the use of bitcoin as a legal tender due to its high price volatility. The IMF welcomes efforts to improve financial inclusion but cautioned on the risks associated with bitcoin. It said the new payments ecosystem and trading in bitcoin should be addressed.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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