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El Salvador passes digital assets legislation, volcano bonds expected to launch soon

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El Salvador passes digital assets legislation, volcano bonds expected to launch soon

The National Bitcoin Office (ONBTC) of El Salvador, established at the end of last year, tweeted that as the first country in the world to adopt Bitcoin as legal tender, El Salvador has passed legislation on digital assets, establishing a legal framework for digital assets other than Bitcoin. This law allows El Salvador to publicly issue and transfer digital assets, paving the way for the upcoming issuance of volcano bonds. El Salvador has also established the National Digital Assets Commission as a regulatory body to protect consumers from fraud in the cryptocurrency sector.

Country Embracing Bitcoin

In September 2021, El Salvador officially passed the Bitcoin Law, making Bitcoin a legal tender in the country with the aim of becoming a center for economic freedom, financial sovereignty, and wealth confiscation resistance.

In 2021, El Salvador's President Nayib Bukele announced the construction plan for Bitcoin City, aiming to attract a large amount of foreign capital to settle in this city. It was claimed that no income tax, capital gains tax, property tax, wage tax, or municipal tax would be levied, and mining would be done through complete reliance on geothermal power generated from volcanoes. The only tax that residents of the city have to pay is a 10% value-added tax, half of which will be used to repay the Bitcoin bond fund, and the other half will be used as funds for public services.

Volcano Bonds Finally Set to Be Issued

After more than a year of shouting about volcano Bitcoin bonds, there is finally an opportunity to issue them under the new legislation. This $1 billion Bitcoin bond will raise $500 million for the infrastructure of Bitcoin City, with the other $500 million being used to purchase Bitcoin, eventually sharing the appreciation of Bitcoin with bondholders.

According to the website's data, El Salvador has purchased 2,492 Bitcoins at an average cost of $43,748 each, spending a total of $109 million on Bitcoin purchases so far.