The first sovereign bond with blockchain technology.. "Bitcoin City" in El Salvador

El Salvador’s parliament has passed a cryptocurrency-related securities law to raise funds through the world’s first blockchain-enabled sovereign bond.

After 62 members of Congress voted in favor of the bill, the bill will be sent to President Najib Bukele for signing.

The purpose of the law is to provide a legal framework for the transfer of digital assets used in the issuance of government debt instruments in El Salvador and to regulate the requirements and obligations of digital asset issuers. This follows last year when El Salvador became the first country to recognize Bitcoin as legal currency.

Bitcoin-backed securities

The bill creates a legal framework to support Bukala’s plans to sell bitcoin-backed bonds, which aim to raise $500 million to help build a tax-exempt coastal city called Bitcoin City.

The government’s proposal also says an additional $500 million will be set aside to buy bitcoin, and any increase in the cryptocurrency’s value will ultimately be shared with bondholders.

Bitcoin.. the official trading currency

In June 2021, the Parliament of El Salvador, in an unprecedented step in the world, overwhelmingly approved the law that considered the electronic currency “Bitcoin” legal. 62 out of 84 members of the Legislative Assembly (Parliament) voted in favor of the bill presented by the President of the Republic, Nayeb Bukele.

The first article of the text of the law states that its purpose is to “regulate Bitcoin as a legal currency that is not limited by the power of liberalization and is not limited by any transaction or any condition for natural, legal or legal entities. carry it out.”

The President of Salvador has announced that foreigners who invest in Bitcoin digital currency in El Salvador will get the right to permanent residence in the country.

And in September of that year, El Salvador became the first country to adopt the digital currency Bitcoin as its official currency in a move that sparked debate about the possibilities and risks of using cryptocurrency.

Stores will be required to accept the controversial cryptocurrency as a legal method of payment from September 7, 2021.

The president has justified the legalization of bitcoin with the goal of creating jobs and “giving access to the financial system to thousands of people outside the legal economy.” “70 percent of the population does not have a bank account and works in the informal economy.

Bitcoin will be the legal currency in El Salvador after the law is approved in ninety years a day, as citizens will be able to pay their taxes in cryptocurrency. Thus, El Salvador will have two legal currencies, the US dollar and Bitcoin.

In El Salvador’s dollar-dependent economy, remittances to El Salvador from abroad are a major support, accounting for 22% of GDP. Bitcoin is an asset that is not regulated by a central authority.

Millions of people are expected to download the government’s new digital wallet program, which gives every citizen $30 worth of bitcoins for free.

Bitcoin users around the world are buying $30 worth of digital currency to support and increase the value of the troubled currency.

The country has installed more than 200 new cash registers across the country to provide the ability to convert dollars to bitcoins.

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