The government of El Salvador has just announced that it is working on the development of a regulatory framework, in particular 20 draft laws, aimed at regulating Bitcoin bonds.
Alejandra Zelaya, head of the country's finance ministry, has reported the bills will regulate the issuance of securities as cryptocurrency in order to ensure the viability of Bitcoin bonds that proposed in November 2021. She has said:
"This is to give a legal structure and legal certainty to all those who buy the Bitcoin bond."
However, it should be noted that at the moment there has been no information on the expected dates on which the legislation will be submitted to regulators.
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The country's authorities intend to raise around $1 billion through the issuance of Bitcoin bonds. The funds will be used to finance the Bitcoin City initiative, which the country’s president Bukele has promised will provide "digital and technological education, geothermal energy for the entire city, and efficient and sustainable public transportation."
One of the features of Bitcoin City is Bitcoin mining using geothermal energy generated by a volcano, which has led to the bonds being dubbed "Volcano Bonds." The mining operation mined its first 0.00599179 Bitcoin on October 1, 2021.
Proceeds from the bond issue could also be used to pay for an $800 million Eurobond issue maturing in January 2023.