El Salvador Passes Bill to Create Bitcoin City and Volcano Bond
• El Salvador has passed a bill that paves the way for the creation of a legal structure for all cryptocurrencies.
• The bill will create a Bitcoin-backed bond, known as the “Volcano Bond,” to reduce government debt and help establish a planned “Bitcoin City” in the country.
• El Salvador President Nayib Bukele is an advocate for cryptocurrencies and has proposed the measure as the next step towards achieving the goal of making Bitcoin legal tender.
El Salvador has taken a major step towards embracing cryptocurrencies with the passing of a bill that will create a legal structure for them. The bill will create a Bitcoin-backed bond, dubbed the “Volcano Bond,” which will be used to reduce government debt and help establish a planned “Bitcoin City” in the country.
The news was announced on Thursday by El Salvador’s National Bitcoin Office (ONBTC) and was proposed one year ago by the nation’s Minister of the Economy Maria Luisa Hayem Brevé. The approval of the bill is a significant step closer to the realization of the project.
El Salvador President Nayib Bukele has been a vocal advocate of cryptocurrencies, and believes that they can bring more Salvadorans into the formal economy. In September 2021, he made Bitcoin a legal tender in El Salvador, mandating that all business establishments accept the cryptocurrency. To facilitate the adoption of Bitcoin, government-issued digital wallets containing $30 worth of Bitcoin were made available to Salvadorans. Furthermore, taxes can now be paid in BTC in accordance with the law, and businesses must accept crypto unless they are technologically unable to do so.
The “Volcano Bond” will be used to reduce government debt and bring more economic activity to El Salvador. The bond will be backed by Bitcoin, and will be issued in a form of a security to help finance the construction of a “Bitcoin City” in the country. The city is expected to be a hub for cryptocurrency, blockchain, and other innovative technologies.
El Salvador’s embrace of cryptocurrencies has been met with wide acclaim and is a sign of the growing trend of governments turning to digital assets as a means of streamlining their financial systems. With the passing of this bill, El Salvador is well on its way to becoming a global hub for cryptocurrency and blockchain innovation.