El Salvador’s presidency has sent a digital securities bill to lawmakers, bringing the country one step closer to raising $1 billion by issuing the world’s first blockchain-based sovereign bond.
On Tuesday night, the president’s spokesperson released a copy of the 33-page legislation that calls for the creation of the Digital Assets Commission and the Bitcoin Fund Management Agency to oversee cryptocurrency-related debt sales.
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The text explains that the purpose of the bill is to provide a legal framework for the transfer of digital assets used in the issuance of public debt in El Salvador, as well as to regulate the requirements and obligations of issuers and providers of digital assets.
The proposed blockchain launch and trade aims to help finance the construction of a tax-free coastal bitcoin city that would harvest thermal energy from a nearby volcano to mine the cryptocurrency, with a minimum investment of $100.
The bond issue also aims to raise $500 million for Bitcoin City infrastructure and another $500 million for Bitcoin purchases, with any increase in the digital currency’s value ultimately being shared with bondholders.
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Last year, El Salvador became the first country to legalize Bitcoin. Cryptocurrency champion Nayib Bukela, the president of El Salvador, has been trying to pitch bitcoin-backed bonds to international investors, but with little success.
The controversial initiative raises concerns about the country’s creditworthiness amid stalled talks with the International Monetary Fund on funding to help close the budget deficit.
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