Maria Luisa Hayem Brevé, El Salvador's Minister of Economy has reportedly submitted a digital asset issuance bill to the country's legislature to launch a "Volcano" bond backed by the major cryptocurrency Bitcoin (BTC).
Clarified, the issuance of $1 billion bonds from Liquid Network, the associated BTC sidechain and bond proceedings* will be used for the purchase of BTC and the construction of energy and mining infrastructure of the digital asset.
*An agreement or credit payment made in connection with a bond or other agreement between the authority and another person who provides a guarantee for the payment of the bond.
Explained in more detail, the sidechain will allow a secure use of tokens by complying with the rules it sets.
While liquid is a sidechain that allows BTC to flow between liquid and the network of digital assets while Liquid Network is the amount of BTC that will be managed by the network staff.
According to Paolo Ardoino, Chief Technology Officer (CTO) of cryptocurrency exchange Bitfinex, El Salvador will become the financial center of central and south America if digital securities laws are established.
Following that, Bitfinex was granted a license to process and list bond issues in El Salvador.
Generally, the bond will pay a yield of 6.5% when the government should share its profits with investors as part of the BTC Dividend distributed annually using Blockstream's asset management platform.
In the meantime, the new planning or initiative is capable of bringing many benefits to the country of El Salvador as it can increase capital and attract more investors to the country.
Therefore, the bill is said to be presented to the National Congress today to get the approval which is expected to happen before Christmas, commented President Nayib Bukele.
