El Salvador Congress Receives 20 Bills Ahead of Bitcoin City Initiative

El Salvador government prepares its proposed legal framework on Bitcoin bonds for Congress’s approval.

By
Chung Yee
on
January 6, 2022
Category:
Blockchain News

Regulatory Clarity

El Salvador’s finance minister, Alejandro Zelaya said in an interview with a local television that the government will seek Congress’s approval for its 20 draft bills for its Volcano Bonds, a $1 billion Bitcoin bond issue. The government will be setting the legal framework for its upcoming Bitcoin bonds. 

The legal framework will cover the legalities relating to the financial markets and securities. President Nayib Bukele was bullish on the prospect of the bonds and believes that it will be oversubscribed when he tweeted to the world on January 3. 

Source

In November, the charismatic president announced that the state will be the world’s first Bitcoin city to be funded by Bitcoin bonds. Half of the funds raised will be used to build infrastructure for its ambitious plan and the other other half to purchase more Bitcoins. The bonds dubbed as ‘Volcano Bonds’ are worth $1 billion with a coupon rate of 6.5%.

Source: El Salvador Bitcoin move is aimed at opening opportunities to the country in terms of investment and financial innovation 

Varying Points of View

The controversial move by the El Salvadoran government has invited criticism from mainstream economists. Institutions such as the International Monetary Fund (IMF) and the Bank of England through its governor have criticised the decision to adopt Bitcoin as the sovereign state’s legal tender. 

The government also faced mounting pressure domestically. Protestors took to the streets in October but these protests were short-lived. 

Source: El Salvador’s move to adopt Bitcoin as its legal tender has created discontent to some El Salvadoran

President Nayib Bukele in a tweet on Jan 2 made a few bullish predictions on Bitcoin. He predicts that Bitcoin will reach $100k and two more countries will follow its footstep to make Bitcoin a legal tender. The decision, however controversial, if proven to work for El Salvador, will turn detractors to supporters.  


Bitcoin’s Promise

El Salvador is the ultimate test of Bitcoin’s promise of financial liberty. Contrary to Bukele’s critics that criticized him as a dictator, the Bitcoin move is anything but dictatorial. The narrative that has been fueling its upward momentum to the market capitalization of $816 billion today rides on the promise of inclusiveness, financial freedom and censorship resistant proprietaries. 

2022 will be an interesting year as the Bitcoin experiment continues. If El Salvador manages to revive its economy, the Bitcoin narrative will receive the validation it needs. 

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Chung Yee

Chung Yee has a legal background and has been involved in research works for the legal and compliance industry. Writing is his passion, centered on topics such as the blockchain and finance. His largest crypto holdings are Solana, Ethereum, and BNB Token.

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