El Salavador parliament voted in favour of a bill which will ease the issuance of Bitcoin Bonds.
The bill was not passed unanimously, with 62 votes supporting the bill. The digital securities bill will “establish the legal order that grants legal certainty to transfer operations with any title of digital assets that are used in the issuance of public offerings carried out in El Salvador.” Local media reports state that the main purpose of the bill is to facilitate the issue of volcano “Volcán” bonds likely.” Those who opposed the bill said that the bill does not respond to the problems of the public.
About the bill
Among other actions, the bill asks for the creation of a national digital assets commission that will serve as a crypto regulation body and a promoter of the market. Perhaps most interestingly, the bill will create a Bitcoin Fund Administration Agency. This will focus on “the administration, safeguarding, and investment of funds from public offerings of digital assets carried out by the Salvadoran State and the returns that come from said offers.”
President Bukele’s plan behind the move
President Nayib Bukele has been planning to launch his Bitcoin-backed “Volcano Bonds” for over a year but has been forced to delay their issuance due to “economic instability stemming from the war between Russia and Ukraine”. Late in 2022, it was reported that the nation’s parliament received a digital securities bill that would enable the launch of the bonds.
“Volcano Bonds” represent El Salvador’s plans to issue Bitcoin-backed bonds that would fund the $1 billion “Bitcoin City” project. They are named after the country’s 160 volcanos that would provide the thermal energy for sustainable mining of Bitcoin. In early 2022, initial attempts to find backers for the bonds were met with lukewarm reception with many potential creditors reportedly fearing the country would default on its debt.
El Salvador’s Bitcoin Office released a statement in response to the vote that read in part, “Today El Salvador builds on our first-mover advantage by passing landmark legislation establishing a legal framework for all digital assets that are not bitcoin. The law also paves the way for the volcano bonds which we will soon begin issuing.”
Max Keiser, a Bitcoin educator and advocate who has also been a major proponent for El Salvador’s adoption of bitcoin since the process began, states that he believes “This is one of the most important milestones yet. Making Bitcoin legal tender in September, 2021 put El Salvador on the global financial map. This new law furthers the mission of President Bukele by establishing a foundation for a new global, digital securities layer built on Bitcoin.”
