The Salvadoran Congress passed the Digital Securities Law, planning to issue Bitcoin bonds to raise $1 billion

ChainCatcher news, the Salvadoran Congress has announced the passage of a digital securities law that allows the country to raise funds through the world's first sovereign blockchain bond. The Congress passed the bill with a vote of 62 to 16, which will then be sent to President Nayib Bukele for signing. The bill creates a legal framework that will support Bukele's sale of Bitcoin bonds, aimed at raising $500 million to build a tax-free coastal town called Bitcoin City, which will utilize geothermal energy from nearby volcanoes to mine digital currency.

According to the government's proposal, an additional $500 million will be specifically used to purchase Bitcoin, and any appreciation of the digital currency will ultimately be shared with bondholders. Under the government's initial proposal, these tokenized bonds will be denominated in U.S. dollars, with an annual interest rate of 6.5% for a period of 10 years. The plan has faced criticism from credit rating agencies and the International Monetary Fund.

Previously, the Salvadoran government had promised to sell Bitcoin bonds in the first quarter of 2021, but the issuance was delayed multiple times due to the drop in Bitcoin prices. According to Bukele's tweet, by June 2021, the Salvadoran government had purchased 2,381 Bitcoins. On November 16 of the same year, he stated that the government would buy one Bitcoin every day. (Bloomberg)