El Salvador, the first and only country in the world to give Bitcoin legal tender status, is preparing to introduce 20 bills to provide a legal framework for its upcoming Bitcoin bonds. The government, led by its pro-Bitcoin president Nayib Bukele, said the money raised will be used to build infrastructure for Bitcoin City and buy more Bitcoin. The Central American country plans to build an entire city based on the largest cryptocurrency Bitcoin. In order to realize the massive project along the Gulf of Fonseca near a volcano, it wants to issue the $1 billion bond known as the Volcano Bonds.
El Salvador’s finance minister Alejandro Zelaya said last week that the government will send about 20 bills related to the bond to Congress for approval. The bills are intended to cover financial markets and investments in securities to provide a legal basis for issuance of the bonds, he told local TV. “[This is] to provide legal structure and legal certainty to anyone buying the Bitcoin bond,” he added.
President Bukele’s administration hopes Bitcoin will boost the country’s economic growth and provide new investment opportunities. He counts on the price of Bitcoin to maintain an overall upward trajectory for the success of his initiatives. Experts have also said that they expect Bitcoin to remain positive for at least the current year. But they have also warned about the extreme volatility that the crypto industry usually displays.
Bitcoin bonds offer a safer alternative to direct investment for investors who want to invest in crypto but do not want to be exposed to the daily price fluctuations. The Bitcoin bonds are likely to be issued this year and President Bukele recently predicted that it will be oversubscribed. He also said Bitcoin City will begin construction this year.
El Salvador passed a law in September last year to make Bitcoin legal tender alongside the US dollar. The rollout was marked by initial hiccups.