El Salvador’s quest to become the leading jurisdiction in digital assets investment is well documented, and the country is set to launch another crypto product in the summer. The chief technical officer (CTO) of crypto exchange, Bitfinex revealed that the country would soon unveil its Bitcoin Bonds, but it comes with a catch.
El Salvador to Unveil Bitcoin Bonds
Speaking at the Paris Blockchain Week, Bitfinex CTO Paolo Ardoino stated that the long-awaited Bitcoin Bond by the South American nation would be launched between June to September. Ardoino noted that the bonds are not like other bonds but will be digital securities that El Salvador could issue.
According to the Bitfinex CTO, the country has already completed drafting the legislation that would allow for the issuance of digital securities. A local news outlet, Criptonoticias, disclosed that the National Assembly had passed the new law.
Still, El Salvador is reportedly working on establishing an agency to oversee asset issuance. The news platform suggests that this may be the last step towards the nation’s move to launch its Bitcoin Bonds.
On why the offering will not be issued in the form of bonds, Ardoino explained that El Salvador may have taken a cue from the United States. According to him, the US Treasury interest rates dropped when the idea of developing a Bitcoin Bond was put forward.
He added that the bonds would generate a 7% annual return. Moreover, with higher interest rates, selling the bonds at the 7% annual return rate as an investment product will take a lot of work.
Thus, the feedback from the potential investors is that they prefer that the bonds be converted to shares to maximize returns.
With El Salvador about to launch its Bitcoin Bonds, Bitfinex will reportedly list the shares on its trading platform, with the company already working with the Central American nation for some time. The bond project was announced after President Nayib Bukele approved Bitcoin as a legal tender in September 2021.
The National Assembly followed suit by drafting a law that would allow the country to issue BTC-based bonds. However, the prolonged crypto market correction forced the government to shift the launch date repeatedly.
Furthermore, the bonds offer is already named the “volcano bonds,” referencing El Salvador’s numerous volcanic mountains and the country’s audacious and ambitious Bitcoin City Project. President Bukele has continuously stressed his intentions to use the bond sales proceeds to create a tax-free hub for Bitcoin enthusiasts.
The proposed Bitcoin City will be developed at the foot of a volcano and fitted with a geothermal plant to power BTC mining. The collaboration between Bitfinex and Bukele for the crypto bonds could generate close to $1 billion in gains.
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