El Salvador has approved a new bill which makes bonds backed by Bitcoin legal.
The Central American country will leverage the law to create bonds required for financing Bitcoin City’s mining infrastructure and development. Technical support for the bonds will be provided by Bitifinex. The Bitcoin-backed bonds gained notoriety as Volcano bonds.
The country hopes that the bonds will help raise over USD 1 billion. The recently passed law creates a passage for virtual assets beyond BTC bonds to see fruition.
The new law was approved by El Salvador’s legislative body on the 11th of January. The country’s National Bitcoin Office released a statement mentioning that there is a new law that has been approved for creating bonds backed by Bitcoin.
The Volcano bonds’ issuance will start as soon as possible. The law managed to secure 62 voters which ensured that President Nayib will approve the bill. Just 16 government officials were against the bonds. The Central American country wishes to use crypto bonds to repay its debts. Furthermore, the Bitcoin City infrastructure and the Bitcoin mining process will benefit from financing resulting from these bonds.
Bitcoin City is projected to become a crypto mining hub with landmark status. The necessary energy is to be supplied via hydrothermal energy emitted by a volcano, hence the name Volcano bonds.