El Salvador is making moves that could lead the country to raise $1 billion in bitcoin-backed bonds. The economy minister submitted a bill that seeks to broaden the legal framework to lead to the adoption of all cryptocurrencies. The IMF has objected to El Salvador’s exposure to bitcoin. Loading Something is loading.
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El Salvador is pressing on with efforts that could lead the country to raise $1 billion in bitcoin-backed bonds, with President Nayib Bukele bucking international concerns about the country’s exposure to the cryptocurrency’s volatile price swings.
The country’s economy minister on Tuesday submitted a 33-page bill that seeks to broaden legal framework to lead to the adoption of all cryptocurrencies in the Central American country.
The bill submitted to the legislative assembly sets the country toward potentially raising $1 billion from the world’s first sovereign bond backed by bitcoin using blockchain technology. In September 2021, El Salvador became the first nation in the world to adopt bitcoin as a legal currency.
The bill may advance to a Congressional vote at a time the cryptocurrency market is mired in a so-called crypto winter, with prices for bitcoin and other digital coins sharply lower than they were last year. Exacerbating rough conditions was this month’s collapse of FTX, once the world’s third-largest crypto exchange.
Bukele in November 2021 said El Salvador had partnered with digital assets firm Blockstream to launch a so-called bitcoin bond dubbed Volcano Bonds. Half of the funds to be raised – $500 million – would be used to construct a coastal “Bitcoin City” near the Conchagua volcano to attract investment. The other half of the funds would be used to buy more bitcoin.
The International Monetary Fund has objected to El Salvador’s commitment to bitcoin as legal tender and has indicated it wouldn’t aid the country with looming debt payments as there are “large risks” associated with the cryptocurrency.
Bukele last week declared his country would begin buying one bitcoin every day. El Salvador made its last bitcoin purchase in July, according to a CoinTelegraph report.
The Nuevas Ideas party led by Bukele holds the majority in the legislature. A bitcoin-backed bond cannot be issued before Congress passed the proposed legislation.
Bitcoin during Wednesday’s session was up 1.1% at $16, 451. It has dropped about 71% over the past 12 months, sinking from an all-time high of $69,000.