El Salvador Passes landmark Crypto Bill, Clearing Way for Bitcoin-Backed Bonds

The “Digital Asset Issuance” legislation will also Create a Regulatory body and lay out a lawful framework for every single digital asset.

El Salvador has passed landmark legislation providing the lawful framework for a Bitcoin-backed bond — known as the “Volcano Bond” — that will be utilized to settle sovereign debt and fund the construction of its proposed “Bitcoin City”.

The bill passed on Jan. 11 with 62 decisions in favor of and 16 against, and is set to become regulation after it is ratified by President Bukele.

The National Bitcoin Office of El Salvador reported the entry of the bill in a Jan. 11 Twitter thread, taking note of that it would begin issuing the bonds soon.

According to Crypto Exchange Bitfinex, which is the technology provider for the bonds, the Volcano Bond — or Volcano Tokens — would allow El Salvador to raise capital to settle its sovereign debt, fund construction of the Bitcoin City and create Bitcoin mining infrastructure.
The volcano descriptor for the bonds is derived from the location of the country’s Bitcoin City, which is set to become a renewable Crypto-minin hub fueled by hydrothermal energy from the close by Conchagua volcano.
Bitfinex takes note of that the city would be a special economic zone like those found in China, which would offer duty benefits, Crypto-accommodating regulations and in any case boost Bitcoin businesses for its residents.

The bonds have been focused on to raise $1 billion for the country, with half of it going into building the special economic zone.

The move to pass the new Digital Securities Regulation and enable new instruments like the Bitcoin Bonds will help El Salvador take care of their current debts be basic to changing the country into a significant financial center of the world.

The bill also includes a legitimate framework for all digital assets that are not Bitcoin, notwithstanding those gave on Bitcoin, and creates a new regulatory agency that will be responsible for applying the securities regulation and providing insurance from bad actors.