El Salvador's government, led by President Nayiba Bukele, has moved forward with plans to issue Bitcoin bonds, drafting 20 bills to provide them with a legal framework.
Treasury chief Alejandra Zelaya told Salvadoran media outlet El Mundo on Jan. 4 that the bills will include legislation to issue securities as cryptocurrencies to ensure the viability of Bitcoin bonds, which were proposed in November 2021.
The $1 billion requested for the bond issue will be used to fund the Bitcoin City initiative, which Mayor Bukele promised would provide "digital and technology education, citywide geothermal energy, and efficient and sustainable public transportation."
One of the features of Bitcoin City is a Bitcoin ( BTC ) mining operation that uses geothermal energy generated by a volcano to power mining platforms - leading to the bonds being called "Volcanoes". The mining operation mines the first 0.00599179 Bitcoin on October 1, 2021.
Funds from the bond issue can also be used to repay an $800 million Eurobond issue that matures in January 2023. Zelaya told El Mundo that the country will have to find financiers to help fulfill their obligation to repay the Eurobond, which could come from Bitcoin bonds or from "institutional offers from various investment banks," rather than from another Eurobond issue.
