Connect with us
Active Currencies 14939
Market Cap $2,417,588,186,824.80
Bitcoin Share 52.72%
24h Market Cap Change $-4.18

El Salvador to soon issue Bitcoin-backed bonds- Here’s everything you need to know

2min Read
El Salvador to soon issue Bitcoin-backed bonds- Here's everything you need to know

Share this article

El Salvador’s Minister of the Economy Maria Luisa Hayem Brevé presented a digital assets issuance bill in the legislative assembly, in order to launch Bitcoin-backed bonds.

The plan was announced in November last year and its bill was submitted on 17 November. On 23 November, it was presented to Congress.

El Salvador to build a Bitcoin City?

This initiative aims to issue $1 billion in bonds on the Liquid Network, a federated Bitcoin sidechain. The fund is supposed to be distributed in two equal parts, $500 million for direct Bitcoin allocation and another $500 million for creating crypto mining and energy infrastructure in the region.

The bonds will pay a 6.5% yield and allow investors to gain citizenship quickly. Once the original $500 million has been monetized, the government will distribute half of the additional gains to investors as a Bitcoin Dividend. These dividends will be distributed on an annual basis through Blockstream’s asset management platform.

The tax-free Bitcoin City would be built with the help of the proposed blockchain bonds through a $100 million investment, which would also provide geothermal energy from a nearby volcano for crypto mining. Cryptocurrency exchange Bitfinex is about to be permitted a license in order to be able to process and list the bond issuance in the country.

Bitfinex CTO Paolo Ardoino took to Twitter to write, “Digital securities law will enable El Salvador to be the financial center of central and south America.”

In September 2021, El Salvador became the first country to adopt Bitcoin as a legal tender. This step of the government is an instrument of creating a legal framework for transferring virtual assets in the country’s public issuances, in addition to regulating the requirements and obligations of issuers and providers of virtual assets.

How are the Bitcoin whales performing?

Glassnode recently released a report that looks at the financial position of Whales and Bitcoin’s old hands in the wake of FTX’s collapse.

BTC is currently flowing out of exchanges at a rate of -172.7k BTC per month, surpassing the previous peak set after the June 2022 market collapse. Holders and whales are currently seeking refuge in self-custody. Total confirmed transactions have also increased over the last two weeks, reaching a multi-month high of 246k per day.

Source: Glassnode

The yellow trace in the chart below depicts the average withdrawal price of the Whale cohort since 5 July 2017 (Binance’s launch), which was $17,825 at the time of report publication.

This is the first time that the whale cohort has witnessed an unrealized loss since March 2020. Whales have been depositing coins to exchanges, with net inflows averaging between 5k and 7k BTC per day over the last week.

Source: Glassnode

Share

Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.