El Salvador Passes Landmark Laws For All Cryptocurrencies

El Salvador continues its massive embrace of bitcoin by passing a bill that paves the trail for the creation of a legal structure for all cryptocurrencies.

The legislative framework for a Bitcoin-backed bond, generally known as the “Volcano Bond,” will likely be used to cut back government debt and support the establishment of a planned “Bitcoin City” within the country.

The National Bitcoin Office of El Salvador (ONBTC) tweeted the news on January 11, stating that the law had been passed on Thursday.

Exactly one yr after the revealing of the plan, El Salvador’s Minister of the Economy Maria Luisa Hayem Brevé proposed the measure as the following step towards achieving this goal.

The nation is now a major step closer to bringing the crypto bonds into existence consequently of the approval.

El Salvador President Nayib Bukele with the laser eyes. Image from Nayib Bukele Twitter

El Salvador’s Ambitious Bitcoin Program

El Salvador became the primary nation to make bitcoin legal tender in September 2021, mandating that every one business establishments accept the cryptocurrency.

As a part of the deployment, government-issued digital wallets containing $30 value of Bitcoin were made available to Salvadorans.

Taxes could also be paid in BTC in accordance with the law, and businesses must accept crypto unless they’re technologically unable to achieve this.

El Salvador’s president, Nayib Bukele, is a real believer in crypto. He has advocated for Bitcoin’s acceptance as a method of bringing more Salvadorans into the formal economy, one-third of whom shouldn’t have bank accounts.

Bitcoin city

Cover art/illustration via CryptoSlate

The volcano descriptor for the bonds stems from the location of Bitcoin City, which is slated to grow to be a renewable crypto-mining hub fuelled by hydrothermal power from the adjoining Conchagua volcano.

Certainly one of the objectives of the bond issuance could be to speculate 50% of the funds in cryptocurrencies and the remaining 50% within the infrastructure required to expand the digital currency sector within the Central American nation.

Crypto Bond Package: Citizenship In El Salvador

The tokenized bonds could be denominated in U.S. dollars, have a 10-year maturity date, and earn an interest of 6.5%, based on the initial plan. The bonds also needs to allow investors to get citizenship within the country.

The ONBTC noted that the passage of this digital securities act provides “consumer protection against rogue actors within the ‘crypto’ area, while also firmly establishing that we’re open for business to all those that decide to create the longer term with us on bitcoin.”

BTC total market cap at $348 billion on the each day chart | Chart: TradingView.com

As of writing, Bitcoin is trading at $18,113, up 7.5% within the last seven days, data from Coingecko show.

Chart: Coingecko

The legalization of crypto placed El Salvador on the world’s financial map. This recent law advances the goals of Bukele by laying the groundwork for a brand new Bitcoin-based global digital securities framework.

Meanwhile, Bitfinex reports that El Salvador’s Bitcoin City could be a special economic zone just like those in China, which would offer tax incentives, crypto-friendly rules, and other incentives for crypto enterprises amongst its people.

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