El Salvador Preparing 20 Bills To Provide Legal Framework To Bitcoin Bonds

El Salvador is drafting legislations to give legal framework to Bitcoin bonds
El Salvador is drafting legislations to give legal framework to Bitcoin bonds

El Salvador, the first and only country in the world to give legal tender status to Bitcoin, is preparing to introduce 20 bills to provide a legal framework for its upcoming Bitcoin bonds. The government, led by its pro-Bitcoin President Nayib Bukele, said the funds raised will be used to build infrastructure for Bitcoin City and buy more Bitcoin. The Central American country is planning to build an entire city based on the largest cryptocurrency Bitcoin. To realise the massive project, along the Gulf of Fonseca near a volcano, it aims to issue the $1 billion bond, also called the Volcano Bonds.

El Salvador's Finance Minister Alejandro Zelaya said last week that the government will send around 20 bills related to the bond to Congress for its approval. The bills intend to cover financial markets and investment in securities to provide a legal foundation for issuing the bonds, he told a local TV. “[This is] to provide a legal structure and legal certainty to everyone who buys the Bitcoin bond,” he added.

President Bukele's administration hopes Bitcoin will boost the country's economic growth and offer new investment opportunities. He is counting on Bitcoin's price to maintain an overall upward trajectory for the success of his initiatives. Experts, too, have said they expect Bitcoin to remain positive at least during the current year. But they have also cautioned against the extreme volatility usually shown by the crypto industry.

Bitcoin bonds offer a safer alternative to direct investment to investors who want to invest in crypto but are reluctant to expose themselves to its daily price fluctuations. The Bitcoin bonds are likely to be issued this year and President Bukele recently predicted that it will be oversubscribed. He also said that Bitcoin City will commence construction this year.

El Salvador passed a law to make Bitcoin a legal tender alongside the US dollar in September last year. The rollout was marked by initial hiccups.