El Salvador approves Bitcoin bond by passing bill News ▸ El Salvador ▸ Bitcoin ▸ Adoption
El Salvador approves Bitcoin bond by passing bill
The bonds, worth $1 billion, will fund a "Bitcoin City" and go toward buying more BTC.
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Updated: Jan. 12, 2023 at 12:49 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
El Salvador has passed a bill that will allow the country to sell bonds backed by Bitcoin, according to a report from Bloomberg on Jan. 11.
The country’s Congress approved the bill with 62 votes in favor and 16 votes against. President Nayib Bukele now must sign the bill.
The proposed bonds are part of a larger cryptocurrency strategy. El Salvador will put $500 million of proceeds from those bonds toward Bukele’s proposed plan to build a “Bitcoin City” near a coastal volcano called Conchagua. The city will harness clean volcanic energy to mine cryptocurrency and use Bitcoin as its main currency.
The country will spend the remaining $500 million to buy more Bitcoin on top of the 2,381 BTC ($42 million) that it has already purchased. In fact, the country has pledged to buy 1 BTC per day. Bondholders would reportedly benefit if Bitcoin’s value increases.
El Salvador’s Bitcoin bond has been a work in progress for some time now. Under Bukele’s leadership, El Salvador declared Bitcoin legal tender in 2021, and plans for the bond were first announced in November of that year.
Though the bond was expected to be introduced in early 2022, market conditions delayed progress, and the bond was expected to be introduced in September 2022. However, the bond was delayed again that month due to security concerns, according to statements from El Salvador’s partner Bitfinex.
Furthermore, it does not seem that El Salvador had prospective bond buyers until recently. In February 2022, reports indicated that the county had attracted $500 million worth of verbal commitments — with the possibility of gaining $5 billion more.
Despite the passing of the necessary bill today, it is unclear when the country might begin to issue and sell bonds to buyers.
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Author 
Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Bitfinex
Bitfinex is a digital asset trading platform offering state-of-the-art services for digital currency traders and global liquidity providers.
Nayib Armando Bukele Ortez is a Salvadoran politician and businessman who is the 46th and current President of El Salvador.
