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El Salvador wants To Issue Bitcoin-Backed Bonds, Read Details Here

Hello friends today we will talking about El Salvador. The idea was put up a year after President Nayib Bukele declared he would issue so-called “volcano bonds” to collect $1 billion for his “Bitcoin City” project, which entailed constructing a town on the coast of El Salvador and using bitcoin as collateral for the bonds.

El Salvador’s government, which was the first in the world to accept bitcoin as legal cash, is asking Congress for permission to issue investment bonds in bitcoin.

El Salvador wants To Issue Bitcoin-Backed Bonds

The “Digital Assets Issuance Law,” a piece of legislation intended to restrict the sale of such bonds to domestic and international investors, was received by El Salvador’s government-controlled legislature, it was revealed late on Tuesday.

The suggestion comes a year after President Nayib Bukele declared he would issue so-called “volcano bonds” to raise $1 billion to fund his “Bitcoin City” project, which included constructing a town on the Salvadoran coast supported by bitcoin-backed bonds.

Later, Bukele disclosed that the bonds bore the names of the 170 volcanoes in El Salvador, which would supply geothermal energy to fund bitcoin mining plants.

He had originally anticipated that the bonds would be prepared for release at the start of this year, but according to Finance Minister Alejandro Zelaya, the delay was caused by the country’s economic unpredictability as a result of the conflict between Russia and Ukraine.

The newly proposed measure, according to its draught, aims to establish the National Commission for Digital Assets to regulate the issuance of bitcoin-backed bonds and the Bitcoin Fund Management Agency (AAB) to supervise, protect, and invest funds collected from digital asset offerings.

El Salvador adopted the cryptocurrency as legal tender in September 2021, with Bukele defending the decision as a way to bring wealth to the nation. El Salvador has significant foreign debt and heavily relies on aid from overseas, particularly the United States.

Private estimates indicate that the Bukele administration has so far purchased 2,392 bitcoins for approximately $107 million, even though the value of the bitcoins has decreased by 63% since the recent price collapse.

Also Read: Crypto is still the future despite FTX saga As per Mark Cuban

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