El Salvador took a crucial step toward implementing its ambitious “Bitcoin bonds” project during the crypto market decline. Maria Luisa Hayem Brevé, minister of the economy, introduced a bill confirming the government’s intention to raise $1 billion and invest it in constructing a “Bitcoin city.”
A 33-page digital securities bill issued on November 17 encourages legislators to provide a legislative framework for using digital assets in El Salvador’s public issuances. In addition, they should evaluate the procedure’s requirements and the duties of issuers and asset suppliers.
The administration of Nayib Bukele announced the “volcano bonds” or “Bitcoin bonds” in 2021. The first concept envisioned issuing around $1 billion in these bonds and devoting the proceeds to developing a “Bitcoin city” at the base of the Colchagua volcano. Supposedly, the hydrothermal energy of the volcano would make the city an ideal location for cryptocurrency mining. Still, 50% of the monies generated would be invested directly in Bitcoin.
Throughout the last year, the project has been continually postponed; at one point, its launch phase was slated for the beginning of March, then it was pushed back to September, and then it was delayed again for security concerns.
According to some reports, MPs may ratify the bill before Christmas. Paolo Ardoino, the chief technical officer of the cryptocurrency exchange Bitfinex, which partners with the government of El Salvador on the bonds initiative, seemed hopeful about that period.
Digital securities law will enable El Salvador to be the financial center of central and south America.
— Paolo Ardoino 🍐 (@paoloardoino) November 23, 2022
After Bitcoin became legal tender on September 7, 2021, El Salvador had over 2,301 BTC worth around $103.9 million. During the bull market, the investment profits were even used to construct schools and hospitals.
Nonetheless, as the economy continues to struggle, 77.1% of Salvadoran citizens prefer that the government stop “spending public money on Bitcoin.