El Salvador Submits Bitcoin Bond Bill – Crypto
El Salvador’s economy minister, Maria Luisa Hayem Brevé, has submitted a digital asset issuance law to the country’s legislative assembly, paving the way for the launch of bitcoin-backed “volcano” bonds.
The groundbreaking initiative, announced a year ago, aims to attract capital and investors to El Salvador. At the time, it was revealed that they were planning to issue a $1 billion bond on Bitcoin’s federated sidechain, the Liquid Network, and split the bond process between a $500 million direct bitcoin allocation and an investment of the same amount. energy and bitcoin mining infrastructure in the region.
A sidechain is an independent blockchain that runs in parallel with another blockchain, allowing the secure use of specific blockchain tokens in the sidechain while adhering to different rules, performance requirements, and security mechanisms. Liquid is a Bitcoin sidechain that allows bitcoin to flow between the Liquid and Bitcoin networks with a two-way pin. The representation of bitcoin used in the Liquid network is called L-BTC. Verifiably equivalent BTC is managed and secured by network members, so-called functionaries.
“Digital Securities Law Enables El Salvador to Become Financial Center of Central and South America” wrote Paolo Ardoino, CTO of cryptocurrency exchange Bitfinex, on Twitter.
Bitfinex receives permission to process and introduce bonds issued in El Salvador.
The bonds pay a 6.5% yield and allow investors to gain accelerated citizenship. The government will share half of the additional profits with investors in the form of Bitcoin dividends after monetizing the original $500 million. These dividends are distributed annually on Blockstream’s wealth management platform.
The introduction of the bill, which was hinted at earlier this year, marks the first major milestone before the bonds can see the light of day. Next is getting approval, which is expected to happen before Christmas, a source close to President Nayib Bukele told Crypto. The bill was introduced on November 17 and was presented to the country’s Congress today. It’s embedded in its entirety below.