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El Salvador is preparing to introduce 20 bills to provide a legal framework for its upcoming bitcoin bonds. The funds raised will be used to build infrastructure for Bitcoin City and buy more bitcoin, the Salvadoran government explained.
El Salvador Drafting Legal Framework for Bitcoin Bonds
El Salvadorâ€™s finance minister, Alejandro Zelaya, said in an interview on local television Tuesday that his government will send about 20 bills to Congress concerning the countryâ€™s bitcoin bonds.
The bills will cover financial markets and investment in securities to provide a legal foundation for issuing bitcoin bonds, he explained, adding that the legislation will create a framework to cover corresponding market regulation and issuance of securities in crypto assets. The finance minister described:
(This is) to provide a legal structure and legal certainty to everyone who buys the bitcoin bond.
The Salvadoran government explained that half of the funds raised from the bitcoin bonds will be used to build infrastructure and the rest to buy bitcoin.
The president of El Salvador, Nayib Bukele, announced in November his plan to issue bitcoin bonds worth $1 billion with a coupon rate of 6.5% in order to finance the construction of Bitcoin City. The city will be powered by a volcano and there will not be any taxes in there except for value-added tax (VAT), Bukele further said.
The issuance of the bitcoin bonds is planned for this year. Bukele predicted this week that it will be oversubscribed. He also noted that the construction of Bitcoin City is expected to commence this year.
El Salvador passed a bitcoin law, making BTC legal tender alongside the U.S. dollar in September last year. Since then, the country has purchased 1,391 bitcoins.