El Salvador Soon to Issue Bitcoin Bonds for Bitcoin City Development

JAKARTA - Amid the decline in the crypto market, the government of El Salvador has finally taken decisive steps to realize its ambitious project “Bitcoin bonds”. El Salvador's Minister of Economy, Maria Luisa Hayem Brevé, introduced a law confirming the government's plans to raise 1 billion US dollars (IDR 15.6 trillion) and invest it into building a "Bitcoin city".

The 33-page digital securities bill, dated November 17, urges lawmakers to create a legal framework for using digital assets in El Salvador's issuance of public bonds. They should also consider all the requirements for this procedure and the obligations of the issuer and provider of assets.

“Volcano bonds” or “Bitcoin bonds” were introduced by the government of Nayib Bukele in 2021. Their initial plan proposed to issue around 1 billion US dollars of the bonds and allocate the funds raised for the construction of a “Bitcoin city” near the Colchagua volcano.

That said, the volcano's hydrothermal energy would make the city the perfect crypto mining facility. Half of the funds raised will still be invested directly into Bitcoin

Over the past 12 months, the project has been repeatedly postponed. At some point, its launch phase was scheduled for early March, then postponed to September, only to be postponed once again for "security reasons".

According to some sources, the bill may be approved by legislators before Christmas. Paolo Ardoino, chief technology officer of cryptocurrency exchange Bitfinex, which is working with the El Salvador government on the bond project, seems optimistic about the timeline.

“Digital securities law will allow El Salvador to become the financial center of Central and South America,” Ardoino tweeted, Nov. 23.

After making BTC legal tender on September 7, 2021, El Salvador is currently collecting more than 2.301 BTC with a value of around 103.9 million US dollars (IDR 1.6 trillion). During the bull market, profits from these investments were even used to build schools and hospitals. However, as the country's economy continues to struggle, 77.1% of citizens prefer the Salvadoran government to stop "spending public money on Bitcoin investments."