El Salvador`s First Step To Issue Bitcoin Volcano Bonds

El Salvador to Launch Bitcoin City
  • The introduction of El Salvador’s “volcano” bonds backed by bitcoin was made feasible.
  • The innovative project aims to draw finance and investors to El Salvador.
  • Investors will be able to obtain citizenship quickly through the bonds.

The debut of El Salvador’s bitcoin-backed “volcano” bonds was made possible. This was hedged by the submission of a law authorizing the issuing of digital assets. What’s more, this was done to the nation’s legislative assembly by Minister of the Economy Maria Luisa Hayem Brevé.

Particularly, the innovative project aims to draw finance and investors to El Salvador. Plans to issue $1 billion in bonds on the Liquid Network, a federated Bitcoin sidechain, were made public at the time. 

Proceeds from the bonds would be split between a $500 million direct allocation to bitcoin. Additionally, is an investment of the same amount in the development of the area’s energy and bitcoin mining infrastructure. A sidechain is a separate blockchain that operates in tandem with another blockchain. It enables the secure usage of tokens from the main blockchain. It also adheres to a different set of guidelines, performance standards, and security measures.

With a two-way peg, Liquid’s sidechain for Bitcoin enables bitcoin to move between the Liquid and Bitcoin networks. L-BTC is a symbol for bitcoin that is used on the Liquid network. The network’s users, known as functionaries, administer and safeguard its verifiably comparable quantity of Bitcoin.

“Digital securities law will enable El Salvador to be the financial center of central and south America,” wrote Paolo Ardoino, CTO of cryptocurrency exchange Bitfinex, on Twitter.

To conduct and list the bond issuance in El Salvador, Bitfinex will soon receive a license.

Investors will be able to obtain citizenship quickly through the bonds, which will yield 6.5%. Once the first $500 million has been monetized, the government will distribute half of the additional gains to investors as a Bitcoin Dividend. The asset management platform of Blockstream will be used to distribute these dividends on a yearly basis.

disclaimer read more

Crypto News Land (cryptonewsland.com) , also abbreviated as “CNL”, is an independent media entity — we are not affiliated with any company in the blockchain and cryptocurrency industry. We aim to provide fresh and relevant content that will help build up the crypto space since we believe in its potential to impact the world for the better. All of our news sources are credible and accurate as we know it, although we do not make any warranty as to the validity of their statements as well as their motive behind it. While we make sure to double-check the veracity of information from our sources, we do not make any assurances as to the timeliness and completeness of any information in our website as provided by our sources. Moreover, we disclaim any information on our website as investment or financial advice. We encourage all visitors to do your own research and consult with an expert in the relevant subject before making any investment or trading decision.

Godfrey Mwirigi is an enthusiastic crypto writer with an interest in Bitcoin, blockchain, and technical analysis. With a focus on daily market analysis, his research helps traders and investors alike. His particular interest in digital wallets and blockchain aids his audience in their day-to-day endeavors.

programmer & freelance writer