Bitcoin-powered bonds are all set to gain legal status after El Salvador notified the passage of the landmark bill via Twitter.
President Nayib Bukele is expected to ratify the legislation after it obtained 62 votes in favor and 16 votes against it.
Also known as the “Volcano Bond”, the ambitious proposal was first laid out by Bukele to build the world’s first Bitcoin City, exclusively financed by BTC-backed bonds.
The $1 billion in bonds planned to be issued on Blockstream’s ‘Liquid Network’, a scalability solution built on top of the bitcoin main chain.
The intention was to invest half of the bond proceeds in the infrastructure needed to establish the bitcoin business in the Central American nation, and the other half in the development of the volcano-powered BTC mining program.
The bonds, according to the statement at the time, would generate a yield of 6.5% and enable a fast track for investors to acquire citizenship in the country.
Exactly one year after the announcement of the plan last November, El Salvador moved closer to raising $1 billion through the first sovereign blockchain bond in the world after the presidency forwarded a digital securities bill to lawmakers.
The 33-page bill called for “creating a legal framework for the transfer of digital assets used in El Salvador’s public issuances, as well as regulating the requirements and obligations of issuers and providers of digital assets.”
Finally, on the 1st week of Jan 2023, the finance minister of El Salvador, Alejandro Zelaya, announced that the government will be sending 20 bills to Congress to start the process of issuing Bitcoin Bonds in the country, TronWeekly reported.
Bitcoin Bonds Pushed Back Several Times
In an interview with local media, Zelaya stated that the laws will serve as the foundation for the legal framework and provide everyone who purchases the Bitcoin bond with legal certainty.
He also said that the purpose of doing this is to build a framework for the appropriate market regulation and the issue of crypto asset securities.
With the latest’s approval, the bitcoin bonds in the Central American nation would soon become a reality that was initially set to be issued in the first quarter of 2022.
However, because of the challenging economic environment and the geopolitical unrest in Russia and Ukraine, it was further postponed in September of last year.