The plan will it work? Bitcoin Bonds will soon have the legal support they require. In a recent TV interview Alejandro Zelaya, El Salvador’s Finance Minister, said they were soon sending the necessary bills to Congress. They will issue bonds worth $1B, with a 10-year maturity and a 6.5% coupon. The bitcoin will stay locked for five consecutive years.
This project was announced at Labitconf2021 by President Bukele. Plans are to create Bitcoin City. This will be discussed further. MicroStrategy is proud to present El Salvador’s scheme. El Salvador will invest half of the money in the construction of Bitcoin City, and the remaining half will be used for Bitcoin purchases. Is this a viable plan? They must first sell bonds. They must also establish a regulatory framework in order for them to exist.
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What Did El Salvador’s Finance Minister Say About The Bitcoin Bonds?
In an interview in the local TV show “Frente a Frente,” Zelaya announced the plan’s following steps. Reuters reports:
“El Salvador’s government will send to Congress about twenty bills covering financial markets and investment in securities to provide a legal foundation for issuing bitcoin bonds, Finance Minister Alejandro Zelaya said on Tuesday.”
The Finance Minister didn’t specify exactly when they will introduce the bills. The will to introduce the bills is evident. The following is from El Salvador In English, Zelaya said, “This type of legislation is what we are going to send to the Legislative Assembly to be able to give legal scaffolding and legal certainty to all those who buy the Bitcoin bond.”
“El Salvador podría convertirseEn un centro regional donde los demás países puedan emitir deuda, contamos con grandes ventajas como tener una economía dolarizada y ser de punta de lanza en materia cripto”, expresa el Ministro @AlejandroZelay9 en @Frentea_Frente. pic.twitter.com/uHbEzx4A3c
— Ministerio de Hacienda (@HaciendaSV) January 4, 2022
Through the Ministry of Finance’s Twitter, they quote Zelaya being even more daring. “El Salvador could become a regional center where other countries can issue debt, we have great advantages such as having a dollarized economy and pioneers regarding crypto.”
Everybody searching for freedom: this is the place to come 🇸🇻https://t.co/zupEKC3usB
— Nayib Bukele 🇸🇻 (@nayibbukele) January 5, 2022
Adding fuel to the fire, President Bukele said via Twitter, “It’s to cover and guarantee the Bitcoin Volcano Bonds, but also a full re-engineering of the economy and of the way a nation state does business.” Not satisfied with that bomb, he added, “Everybody searching for freedom: this is the place to come.”
How about Bitcoin City? Are You Ready to Go With Bitcoin City?
The Bitcoin Bonds will finance the construction of Bitcoin City, but, what’s that exactly? What President Bukele will do? announced El Salvador’s plans, NewsBTCReports are timely:
“According to Bukele, Bitcoin City will be a full-fledged metropolis with residential and commercial areas. The city would have shops, restaurants and a port. It also has an airport. There are railway services. Income, property and capital gains taxes would all be exempted. However, residents would only be subject to the value-added tax. This tax will go towards paying for the municipality’s bonds, public infrastructure, and city maintenance.”
Recent developments have seen an increase in the use of RFID. investigative report by podcaster Anita PoschDo not doubt the Bitcoin Bonds or the enterprise as a whole:
“Apparently, the seemingly advanced plan for Bitcoin City was a collage. “At least some of the Bitcoin City presentation slides were downloaded from the internet and there was no detailed plan behind the announcement.” Not only that, the structure behind the Bitcoin bonds that will finance the whole operation was also improvised. “The way the Bitcoin bonds will work was finally decided only a few minutes before Samson Mow took the stage.”
However, the plan is a go, and Blockstream’s Samson Mow is all-in on it. Recently, he tweeted the trailer to a forthcoming documentary about El Salvador and its plans for Bitcoin City. In the tweet, he threw an extremely optimistic, “Bitcoin is going to save the world and it starts here in El Salvador.”
Check out this amazing trailer. @anna_tutovaA new documentary is available on El Salvador. #BitcoinCity. #BitcoinIt is the only way to save the planet, and it begins here in El Salvador. 🇸🇻🌋🚀@nayibbukele @WilliamSorianoH @fulloa51 @maxkeiser pic.twitter.com/GcBUV8d9RN
— Samson Mow (@Excellion) December 29, 2021
Is the plan feasible? Do you think Bitcoin City is a viable project? Are the Bitcoin Bonds a good investment? Is it too risky to invest in Bitcoin Bonds? Wouldn’t it be better for an investor just to buy bitcoin with that bonds money? Is there something missing?
El Salvador must have a framework for issuance of Bitcoin Bonds to answer these questions. The twenty or so bills that will guarantee this are in the process of reaching Congress.
Wilson Edilberto Santana Suarez Featured Photo on Unsplash | Charts by TradingView