El Salvador Approves Digital Asset Legislation
The Volcano Bond, which is backed by Bitcoin, is made possible by a historic law that El Salvador’s parliament passed. The government hopes to use this bond to raise money to reduce its national debt.
El Salvador, which in 2021 became the first nation in the world to accept Bitcoin as legal tender, declared on January 11th that its assembly had approved a law for the issuance of more virtual assets, laying the groundwork for the eventual issuance of Bitcoin bonds.
The bill was approved on January 11 by a vote of 62 to 16, and it will become a law once El Salvador’s President Nayib Bukele has ratified it.
Bukele has long been a proponent of digital assets and believes that the Volcano Bonds, or volcano token, will not only help to pay off the country’s sizable national debt but also open the door for his vision of a bitcoin city—a city powered by volcanoes and resembling the BTC symbol.
The bonds enable foreign investors to obtain citizenship and are expected to yield 6.5%. The objective is to attract foreign investment in $1 billion worth of BTC bonds running on Blockstream’s Liquid Network, giving the struggling economy a much-needed boost.
The country’s Bitcoin Office tweeted about the new law’s passage:
Possibly with detractors of its so-called “Bitcoin revolution” in mind, the office also announces that the new legislation creates the National Digital Assets Commission, “the regulating agency in charge of applying the securities law and protecting the rights of digital asset purchasers as well as issuers in El Salvador, and of deterring fraudsters from operating here.”
(With inputs from Shikha Singh)
You need to login in order to Like
